Wairarapa Times-Age FRIDAY, JULY 5, 1940. A GRIM NECESSITY.

Wairarapa Times-Age, 5 July 1940, Page 4

Wairarapa Times-Age FRIDAY, JULY 5, 1940. A GRIM NECESSITY.

other just verdict is possible upon the resolute action taken by the British Government and Navy against the French Fleet than that a tragic situation has been dealt with in the right way. Not only is this action justified, but to refrain from it in weakness or for any other reason would have been an indefensible violation of duty. The alternatives facing Britain were to take over the French Fleet or to allow it to pass into the hands of the enemy, to be used against the Allies. To repose any faith in assurances by the Nazi dictatorship that it would not use the French warships would have been to sink to an incredible level of fatuity. Infinite sorrow and sympathy must be felt for the French naval officers and men who felt bound to obey the orders of their present Government, but it may nevertheless be hoped that all that is best in France will approve what Britain has done. The handing over of the French Fleet to Germany would have been a deadly blow struck at France as well as at Britain and the Allied forces which are resolved to prosecute the war with unrelenting vigour until Nazism has been overthrown and destroyed.

FINANCING THE WAR.

QNE of the main contentions of the Leader of the Opposition (Mr Hamilton) in the speech with which he opened the debate on the Budget was that the present level of civil expenditure in this country was too high in relation to its war expenditure. Tn the course of his reply, the Prime Minister (Mr Fraser) invited the Leader of the Opposition to say just what, items of expenditure he would cut. On these lines, controversy no doubt might be extended indefinitely, though with little profit. At the same time, however, the Premier showed some evidence of a desire to deal in a purposeful way with problems of war economy, as, for example, when he said: All he wanted to say was that the country could not be stultified in its war effort. He was only anxious to get what would work best and achieve success, and not only careful scrutiny and examination were required, but also courage to try even paths that had been untried if necessary. Examined in that spirit of open-minded inquiry and enterprise, and from no partisan or controversial standpoint, the main heads of national finance as they are meantime adjusted in this country, surely do not afford room for complete satisfaction. Summarising the figures now before Parliament, Mr Hamilton said that for the war, taxation was to yield £14,120/300, internal borrowing £3,630,000 and overseas borrowing £19,/50,000—a total of £37,500,000. For domestic purposes, taxation and revenue were estimated at £37,000,000, borrowing for public works, £15,000,000 and Social Security tax £9,000,000, a total of £61,000,000. These figures provide for an aggregate expenditure from taxation and other revenue and from borrowing of £98,500,000, the total amount of borrowing (for war and civil purposes combined) being £38,380,000. Leaving aside the difficulty pf altering the incidence of war and peace expenditure here disclosed, it surely should be possible for people of all political inclinations to agree that it is desirable.that a country fighting' for its life should do everything it can to enable it to devote to the furtherance of its war effort a greater proportion of its total financial resources (from revenue and loan) than the forty per cent it is meantime so devoting. The root of the matter is production. The leading aim of financial administration in this country evidently should be to unshackle production. The Prime Minister showed that a large part of the heavy civil expenditure, which he defended, is needed to keep in employment men who otherwise would be thrown out of work. This' country, like most others, is faced at present, however, by a tremendous shortage of goods needed for purposes of both war and peace. If there is an immediate need, at least there cannot in these circumstances be any lasting need of depending on artificial methods of keeping men employed—some of them on works which certainly cannot be regarded in the conditions that exist today as essential or even as justified. It is a matter rather of removing artificial restrictions and impediments to the use to the best advantage of the whole of the productive resources of which the Dominion is possessed. An open-minded and methodical examination of the possibilities of building up as speedily as possible useful production of every kind is the true key to a solution of the problems the Budget presents.

THE METHOD OF INFLATION.

J-JAVING now made for himself a little place of his own, inside and outside Parliament, the member for Grey Lynn (Mr J. A. Lee )has his own ideas about the way in which the Dominion should cope with its problems of war finance. In moving an amendment, during the Budget debate on Wednesday evening, Mr Lee said he believed that a large proportion of New Zealand’s war costs could and should be met by the issue of Reserve Bank credits. It is only necessary to look at this counsel to perceive that it is worthless. It is the old story of money and what money'will buy. If the Reserve Bank issued ten notes for one that it has in circulation at present, and multiplied correspondingly the issue of other and larger credits, no one Would be a penny better off unless by some act of magic the volume of goods and services available were increased simultaneously in an equal degree.

While additional credits not balanced by production would do no good, they would do an infinite amount of harm by raising prices of every kind and so, as a British financial authority put it the other day, impoverishing everybody—man, woman and child. Obviously additional Reserve Bank credits could not be applied to meeting our war and other costs overseas. Oversea payments must be made from sterling credits, only to be obtained by exporting and selling goods. Air Lee’s suggestion therefore is that we should be made better off within the Dominion by an issue of Reserve Bank credit. Actually the. effect would be to intensify progressively the state of affairs in which we are troubled, not by a shortage of money, but by a shortage of the things that money will buy.

PRODUCTION FROM THE LAND.

ALREADY there are indications of an excellent response by farmers throughout the Dominion io the appeal made to them to increase production by every means in their power. There can be no question of the great national and Imperial purpose to be served in this way. As a British Minister observed the other day, victory in the war may very well go to the nation that has the last week’s supply of food in hand. Farmers throughout the Empire are appealed to as members of an army of supply, supporting the men in the fighting line. Here in the Wairarapa the organisation aiming at an all-round increase in production is being developed in necessary detail. Group meetings are being called in various parts of the district. One of them is to be held in Carterton tonight.

As might have been expected, an examination in its details of the jiroblem of increasing product ion is bringing to light a good many difficulties, some of which are formidable. The cause to be served, however, amply warrants a most determined attempt to overcome these difficulties. The part to be played by farmers in this war is hardly if at all less important than that to be played by the members of the fighting forces and it is with that fact clearly in mind that the problems involved in increasing production should be attacked. Every encouragement should be given, too, even to small individual efforts which, with others of a like kind, will help to build up a valuable total result.

STATEMENT BY MR a.. - (By Telegraph—Press Association.) WELLINGTON, This Day. A declaration that he had no intention of deviating from the stand he had taken over the dispute with the State Miners’ Union on the West Coast waS made last night by the Minister for Mines, Mr Webb. No negotiations have taken place between the miners and the Government since Tuesday afternoon. “I was amazed at the statement of Mr English, the president of the union, that I had broken a gentleman's agreement in that he alleged I had rushed to the Press with a statement before the dispute was settled,” said Mr Webb, when interviewed last night. “The dispute was already settled and the decision given before I made a statement. I wholeheartedly concurred with the decision because it was in keeping with all the evidence I had read. The State miners decided to g«. on strike and to turn down the earnest appeal of the Prime Minister to resume work, pending a further investigation, which, the Prime Minister promised, would be made in his own office. Mr Fraser also undertook to pay the expenses of a delegation to Wellington to place the matter before him, provided that the miners resumed work. When this appeal was turned down I had no alternative to stating the facts as supplied to me. “And I said then and I repeat it now that I am confident that the State miners as a body cannot concur with the tactics now being adopted,” said Mr Webb. “I earnestly appeal to the officers and men to realise the seriousness of the position which the Government is now facing and to respond to the Government's appeal to resume work.” The statement by the union president (Mr English) above referred to is reported on Page 2.