The Daily News. SATURDAY, MAY 22, 1920. AVOIDING DEPRESSION.

Taranaki Daily News, 22 May 1920, Page 4

The Daily News. SATURDAY, MAY 22, 1920. AVOIDING DEPRESSION.

"It will take us all oar time to avoid a wave of depression," said Mr. Massey at Wellington on Wednesday. There may be some who will smile at this warningj but those who are wise will certainly receive it seriously. The Premier went on to say that a change was coming over the scene of our phenomenal prosperity ; prices in London are dropping; the commandeer of our products is coming to an end and we must not expect to receive the prices for our principal products that we have been receiving, with the result that there will be less money to spend. The fact, of, the matter is that the economic condition of Britain and the world generally has become so grave through 'the effect of war expenditure, and the colossal borrowing to meet it that drastic measures have become necessary to restore the financial equilibrium. The only means fcr averting disaster are economy, the cessation of borrowing, and concentration on greater national production. A moment's consideration will convince impartial inquirers that the prosperity of the producers of the Dominion is due to borrowed money, the Imperial Government having paid for our produce by that means, besides the wages of the vast army of war workers. It is not necessary to enter upon a lengthy recital of the effects produced by this borrowing and the issue of a, paper currency that has become largely inflated. The people of the BinRire are burdened with heavy financial liabilities, necessitating higher taxation, and therefore a restricted expenditure in other directions. Money has become dearer, and the purchasing power of the sovereign considerably less than before the war. British economists, as well as her farseeing statesmen, are agreed that there must be no more borrowing for unproductive purposes, and this means that there will be less to spend. Economy and retrenchment have become imperative,; and though there will still be a good market in Britain for New Zealand produce, Mr. Massey did not overstate the case when lie said we must not expect to receive for our principal products the prices we have been obtaining. We do not take his remarks as striking a note of pessimism, but as wellmeant advice which should be taken to heart. Money, he said, had been pouring into this country in a way we had never previously experienced. The Customs returns have disclosed a aratify-

mg excess in the value of exports over imports, but it would seem that indications point to "a change coming o'er the scene," and it is for that the people should be prepared. By way of compensation the cost of living should decline, and if the people as a whole took a determined stand and refused to buy goods at manifestly exorbitant prices, it would materially hasten the return to normality, "yfe- must," asserted Mr. Massey, "curtail the extravagance which has been going on in town and country for a long time past.-" Doubtless this exhortation will fall on many deaf ears, but those who take it seriously will profit by the warning and be enabled to face with equanimity the inevitable aftermath of the present economic position. All the .available money in the Dominion is urgently needed for public expenditure having for its object the development of the country and the consequent increase in production. The danger of a wave of depression may not at the present moment appear to be worthy of notice. None the less it exists, and it is both wise and expedient to take precautions that will pre- | vent the danger from becoming a reality. Mr. Massey by no means stands alone in proclaiming the necessity for the greatest economy and the putting forth of the utmost efforts towards enlarged production. He is backed up by the most prominent and reliable economists of the day—men who have neither time nor inclination for ordinary politics, but possessing a whole-hearted desire to bring about the raestablishment of sound and stable financial conditions, for thereon alone can the people obtain durable contentment, prosperity and happiness. "We know not what the future—evem the more immediate future—holds, but any person of average intelligence should be able to read and understand the portents which are apparent. In his capacity of Prime . Minister, Mr. Massey has warned | the people of the Dominion that it will take them all their time to avoid a wave of depression. If they are wise they will profit by the warning, though it is quite possible there are not a few who will profess to regard Mr. Massey as a "croaker," because they love luxuries and extravagant self-indulgences* so blindly fhat their idea of life is: "Let us, 1 eat, drink, and be merry, for to-'morrow we die." A loftier and more noble ideal is expected from the mass of the people, and it is for'the Government to set an example in the desired direction, so that the people may be able to visualise the actual conditions which exist and the need for preparing for possible contingencies.