The Sun 42 WYNDHAM STREET, AUCKLAND SATURDAY, NOVEMBER 9, 1929 THE GAMBLING CRAZE

Sun (Auckland), Volume III, Issue 816, 9 November 1929, Page 8

The Sun 42 WYNDHAM STREET, AUCKLAND SATURDAY, NOVEMBER 9, 1929 THE GAMBLING CRAZE

EVERY year ill Great Britain £253,000,000 goes down the drain in gambling. Such is an official estimate and assertion by the Labour President of the Board of Trade.

It is a colossal sum for a nation that has to spend £150,000,000 annually on the relief of social distress caused by unemployment and the chronic poverty of industrial unfitness and old age, the final and possibly the worst malady of mankind. Yet the squandermania in gambling is actually a trivial sum compared with the aggregate wealth belonging to small-scale thrift—any sum between £1,700,000,000 and £2,000,000,000 representing only one-twelfth of Great Britain’s total annual wealth. These figures, too, are official and considered to be conservative estimates.

Thrift may countervail gambling in statistics, hut it has not been urged as an excuse for the disturbing growth of gambling not only in Great Britain and the Irish Eree State (for where is the true son of Erin who, looking at a good bloodhorse, does not wish to put a bit of money on him at the races), but almost all over the world. Even the wealthiest country today is suffering the panic and penalties of inordinate indulgence of the universal gambling craze. There have been days in the past month when the great Dollar Republic has looked like becoming the land of doom.

As far as Great Britain is concerned the effect of a general love of gambling on anything that promises a return of easy profit has become so serious and far-reaching that the Labour Government and the Liberal Party in particular, and many qualified observers and responsible men as well, have demanded an expert inquiry into the extent of the speculative boom and the possible and practicable manner in which the State and influential banking institutions might diminish an orgy of gambling and protect small investors against tbeir own foolishness and immature knowledge and experience of the financial world. In that realm only one law exists—the law as to the survival of the fittest.

The demand for a drastic inquiry into British banking, finance and credit has been conceded by the Labour Government. It has appointed a committee of experts whose range of investigation is wide enough to throw light on obscure causes of speculative finance which too frequently in the past has operated in ways fundamentally injurious to the public interest. Perhaps it savours of political treason for anyone to suggest that not even the Court of the Bank of England i.s infallible in the practice of financial prudence, but still the suggestion has been made so strongly that it and other banking institutions will be summoned to what has been described as “a grand inquest” into British finance. Influential commentators like “The Times” have poohpoohed the idea of inquiring into the exalted and generally mysterious questions of monetary theory and practice, but a multitude of other observers of financial policy has asserted that the nation will no longer remain content with pooh-poohs and assurances that bankers are never wrong. So the whole system is to be investigated thoroughly so that laymen may share the knowledge of experts as regards the fluctuations of a high bank rate, the working of the company system and the reasons for tolerating in difficult times the evils of parasitical finance. The Chancellor of the Exchequer, who knows quite well that high finance is merely extended multiplication of low finance, cries that “there must be something wrong and something which needs attention when an orgy of speculation 3,000 miles away can dislocate the financial system in Great Britain and inflict grave suffering upon the workers in practically every country in the world.”

Of course, it has been explained, though not officially by the silent profession of bankers, that the recent increase in the bank rate was made simply for the purpose of restoring the pound to a point at which it could look the dollar and the franc straight in the eye. The increase was ineyitahle in order to check the flow of British capital abroad to a more profitable financial market, even to a greater den of gamblers in stocks and shares. No market in the world during recent months has had a greater drawing power than the American money market. There, “time money,” or loans for a fixed period, had for many weeks been maintained at from Bto 10 per cent. Also American borrowers have been prepared to pay for “call” money rates of interest varying from 10 to 20 per cent., while money in America nowadays is regarded as very cheap if it can be obtained at 7 per cent. Quite naturally, while the going was good, British investors, who could borrow cheaply at home, lent it dearly across the Atlantic. Perhaps they had not thought that their eagerness for profit would increase British unemployment immediately by 200,000 in numbers within a month. There is no sentiment in speculation. Democracy has caught the gambling craze in every form, and must be protected against its own ignorance and impulses. The small investor has become a financial power, but he still is inexperienced and easily caught by cleverer raiders on his pockets. Hence the need of an inquiry and firm safeguards.