AVOID PESSIMISM

Nelson Evening Mail, Volume LXIV, 17 January 1931, Page 11

AVOID PESSIMISM

“TIGHTEN OUR BELTS”

(Contributed by the N.Z. Welfare League.)

We have to remember in times like these that the influences of depression are cumulative and that it is the usual thing for the outlook to appear more and more unpromising in proportion as the depression nears its end. At the first onset comparatively few lines are affected, gradually others are involved, and so the disturbance spreads. Profits are diminished, causing a decline in security values which not- only inflicts financial loss upon a great many people, but unsettles confidence, which in turn hurts business further and contributes to still greater declines. Moreover, with a diminishing consumptive demand, commodity prices come under pressure, thus introducing additional and still more serious complications. And as the price decline continues, the circle of disturbance grows constantly wider, involving in varying degrees Wages, rents, land values, and finally the credit structure itself which rests in the last analysis upon the basis of values. v ln short, the processes of deflation operate in a vicious circle, each unfavourable development bringing in its train a series of other unfavourable developments, each of which in its turn constitutes a potential source of further difficulty; But obviously this - sort of thing has to come to an end sometime, and the turn is likely to come at the time when to most people the outlook appears the blackest. However black the outlook may be it is foolish to make it worse by talking pessimistically. The psychological effect of such talk is very great, and will undoubtedly help to prolong the depression. It is far more to the point to draw inspiration from our knowledge that there are great resources and strong recuperative powers in the country. This has been proved over and over again in our histoiy. In the past the people when up against serious depression in trade, faced it with much less grousing than to-day, they tightened their belts and worked harder, they curtailed expenditure on non-essen-tial luxuries and did not complain. Today there is a tendency to endeavour to maintain luxuries and appeal to the Government to come to the rescue. This will not help us because the Government can only use our own resources to assist us, and surely it would be wiser to do that ourselves without State intervention.

It is probable that recovery, when it does set in, will be a gradual rather than a rapid process, but it should be remembered that the question is not as to whether recovery will or will not take place, but rather as to how fast, and how far it will go, also it must not be forgotten that it is in periods of depression that the - obstacles loom up most formidably, while we seldom see the forces from which revival springs until afterwards.