ECONOMIC CONTROL

Nelson Evening Mail, Volume LXIV, 3 January 1931, Page 10

ECONOMIC CONTROL

RUSSIAN EXPERIMENT ATTEMPTS IN AUSTRALIA WHERE ARE THEY LEADING? The Australian experiment in economic control is now withjn sight of its goal and the true believers are spurring the jaded steed to a last great effort to reach it (writes “Observer” in the “Sydney Morning Herald”). Long ago they made the local market safe for manufacturers. Then they devised the “new” protection and took the workers under the wing of the State, forbidding any employment ■—at least around the towns —except at wages held “fair and reasonable.” Some of the country dwellers “bucked” at this. So the Australian world was made safe for sugar, butter, and raisin producers. Prices for all these were to be “fair and profitable,” too. It is the wheat-fanners’ turn next and signs are not wanting that meat is to follow after that. Then all production prices will be under total or partial control. It lias cost something to build this Paradise. As we were ill content with the prices our wares and services brought in the world’s markets, we added what we could borrow to what the world paid of its own accord. And that addition has accumulated steadily with an annual interest bill that must come off the voluntary payment for our goods now that borrowing is “off.” Still we are not going back to the miserable pit- 1 tance the world outside gives for things.' We will make up the difference, if we must, by “pledging the credit of the nation.” or, in plain English, by local: promises to pay. In these we shall pay “the fair and reasonable” thing, trusting to our future energy and good fortune to maintain their value.

Have we good reason to count on success in this all-round maintenance of local prices? Why not? We shall soon have taken charge of all phases of Aus-, Indian industry. May we not count on the successful management of each?

NATIONALISED CREDIT IN RUSSIA

It is not as easy as it sounds. They have all these controls and producers’ councils in Russia. They have nationalised credit, with a State Bank manag-' ing the note issue and a Commissariat of Finance looking after Retailed advances to every Government department, producers’ co-operative and trading trust —just the scheme of finance that the measures before our Federal Parliament would set up. With a mighty enthusiasm the planning commission of that nation, free of the “bondage” of foreign debt, has led to a five years’ attack on the country’s needs of better railways, iron and steel works, the mechanisation of agriculture, modernised coal-mining and cheaper goods for all. Russia is not without resources. She has abundant land of the richest quality, coal, iron, gold, silver, oil, timber, wool, cotton, flax, waterways—she is a not-so-smal! edition of the main world itself. Her leaders have had elbow-room, and perfect peace in which to work out this grand experiment of paying each worker and peasant a fair thing and dove-tailing their services in due proportion by the orders of a supreme economic council.

But it now seems that even ort that fair field the grand experiment is collapsing once more. The old, old trouble with paper money—over-issue—lias happened again. There have been signs for a year or two that the production of food, fuel, clothing and shelter was not being maintained at levels equal to the needs of a population growing ,by three millions and a Half a year. One can picture the difficult job of the Russian leaders. The Union of Socialist Soviet Republics is, in effect and intention, a single concern under unified commissariat to see to it that every seller shall have credit and each buyer cash. And each manager of a trust or department, whatever else he does, must pay wages. WORKING OF THE FIVE-YEAR PLAN The five-year .plan was intended to bring down prices by re-equipping every industry on modern lines with the best American technique. No means have been spared to speed up that equipment. Iron and steel furnaces, electrical stations, tractors and agricultural implement factories are rising. Yet every effort is mocked by the effect on prices of the paper money used to pay wages for such things. The roubles in circulation —paper, silver, and copper—have nearly doubled in the last 12 months, rising from 2642 million on Ist October, 1929, to 4750 million at the beginning of September last. The official rate of exchange is still one rouble to 2s o|d of 'English money. It is illegal to give more than a rouble for an English florin, | either at the frontier or inside Russia. Yet illicit dealers will gladly give 60, 80, or even a hundred paper roubles for a pound note. Official index numbers claim: to record both the controlled prices, at which the Soviet trusts and the co- j operative stores sell to those holding! ration tickets and permits, and the; prices paid in the “free” but not always , open markets. .From the nature of secret trading and from the illiteracy of the peasants this claim is highly unlikely to be true to fact. The worker’s ration of houseroom has been cut down of late from eight square metres to six per person (6£ square yards). Shortages of clothing are not remedied by duties ranging from 1000 to 3000 per cent, onj private importations. All the symptoms . are in evidence of another plethora of ’ paper money and dearth of goods, even j of dairy produce and foodstuffs. Once! again the ambition of controlling every- j thing by political orders has come to t grief. But perhaps they know more in Canberra about paper money than cio those clumsy louts in Moscow. Perhaps the goal to which they cheer on the weary and heavy-laden is not tne eld, old: mirage. I