AVERTING INFLATION

Wairarapa Times-Age, 18 October 1940, Page 6

AVERTING INFLATION

TAXATION AND SAVINGS BOTH IMPORTANT OBSERVATIONS BY BRITISH CHANCELLOR. COMPENSATION FOR RAID DAMAGE. i (British Official Wireless.) RUGBY, October 16. Speaking at a luncheon where he was the principal guest, the Chancellor of the Exchequer, Sir Kingsley Wood, said the great gap between war time expenditure and revenue could be filled only by inflation or taxation coupled with real savings made to the point of sacrifice. So far Government policy had enabled inflation to be avoided, but the danger was ever present if a sure and safe course in financial policy was not followed. Stating that taxation was only a bare part of expenditure, the Chancellor stressed the importance of savings. “We are facing a difficult and vital year in our history,” he said. “No half-measures will suffice. For its part the Government must do everything possible to create conditions under, which the maximum response to Government loans and appeals for national savings can be fully attained.” It has been suggested that money had been held back from Government loans by many people because they were uncertain of their financial position should their property or belongings be damaged in air raids. He hoped shortly, to introduce a measure which would remove this perfectly natural apprehension by providing full cdmpensation fox- loss or damage, caused by enemy action. The scheme relating to buildings would be financed by a compulsory contribution by property-owners, aided in certain eventualities by the State. Another scheme which provided opportunity to insure personal effects would be voluntary, while that dealing with the insurance of plant and machinery would, in general, be compulsory. These schemes would be retrospective to the beginning of the war and would remove uncertainty and go far to maintain confidence.