PROFESSOR'S OPINION

Rotorua Morning Post, Volume 2, Issue 288, 30 July 1932, Page 2

PROFESSOR'S OPINION

SUGGE$TS DEPRESSION WILL BENEFIT YOUNG CGUNTRIES. WRITING-OFF NECESSARY. BENALLA (Vic ), July 2. Assoeiate Professor G. L. Wood, of Melbourne University, in an address at Benalla cn the World Depression and tha Primary Producer, said he was of the opinion that the Premiers' Plan should be called the Economists' Plan. ,As far baclc as 1867 John Stuart Mill said, "panics do not destroy capdtal; they merely rsveal the extent to' which it has previously been destroyed by its betrayal into hopelessly unproductive enterprises." That statement stood out as one of the most accurately accurate things ever said by an economist. Since 1929 th's World had experienced two panics of an unprecedented kind, and on a scale hitherto unknown. The first rqsulted from the New York Stock Exchange collapse of November, 1929, and the second from the international crisis of June, 1931. The two cris'es were intimately connected, and the root causes stretched back through the previous decade. Whatever measure of success might follow the attempt to deal with the existing debacle by a series of international conferences the woidd was faced by a long p-eriod of capital losses. The necessity for wholesale "writ-ing-off" could not be evaded, and the sooner courage was screwed to the "sticking point" in France and the United States the earlier would the first step toward recovery be taken. The panic would disappear when productive and unproductive works were separated by cutting losses and by the writing down of capital all over the world. That was the bitterest medicine the investor would h'ave to faee. It would be years before investors would reeover from the strain. The crisis was producing its own resistances against disease within the economic system. The depression was going to give Australian industries an impetus that had nevsr been known, and it was going to be of great benefit to a young country.