The Waikato Times MONDAY, MAY 16, 1938 POLICY OF INSULATION

Waikato Times, Volume 122, Issue 20499, 16 May 1938, Page 6

The Waikato Times MONDAY, MAY 16, 1938 POLICY OF INSULATION

e possibility of insulating the Dominion against the effects p e P^ ss ? on overs eas has been widely discussed ever since the nme Minister, speaking at Featherston some time ago, stated that e ?o\ eminent had worked out its plans in detail, and was ready to counter any adverse movement. The president of the National ai y as asked the Minister of Finance to give the country some pai ticu ars w hen he addresses a meeting in his own electorate tonig t, and the information would be of general interest. The conence of the Prime Minister in the efficiency of the plans is enoouiaging, although it will be hoped that they will never have to be put into operation. No one would welcome such a development simp 3in order to test the preparations made to meet it. In the Ist speech he delivered in Parliament, after assuming office as head ot the new Administration, Mr Savage said: “Unless people are prepaier to pay’ an economic price to purchase the production of the peop e o Yew Zealand we shall never get out of the difficulty’ we are in to-day’. At that early stage the Prime Minister evidently beleied that economic prices for produce were essential to the welfare 0 “ e comm unity. To-day’ he says that plans have been completed to protect the country against a drastic fall in prices, so that the difficulties he saw in 1930 must have been removed. The Minister of Finance has been much more cautious in his approach to the problem. In his second Budget he said: “The Govemment know that they cannot isolate the Dominion completely’ from all t e effects of prices overseas,” a view apparently- not shared by his eader. And there was a very interesting reference to what Labour would do in the event of another prolonged depression, made by Mr - ash last September during the course of a debate. The Minister said that the previous Government had had an alternative to the policy adopted, and that Labour favoured the other course. He explained it in these words: “That alternative policy-, difficult as it might have been to introduce then or to introduce now, was to meet the danger of a possible fall in national income by stimulating the production of commodities required for internal consumption rather than for export overseas.” Mr Nash added: “That is the policy that Labour would have followed if it had then been in power.” These are the most direct references made by members of the Ministry to the question of the policy to be adopted in the event of overseas markets falling. Other members of the Ministry have been much more vague, the Minister of Education contenting himself with stating that Labour would not do what the previous Government had done. That there is need for careful consideration of policy, if factors that are completely beyond the control of the Dominion tend to reduce the national income, will be admitted. It is not an evidence of pessimism, but simply of caution. The fact that the wool cheque last season dropped by possibly- £7,000,000, when compared with the returns for the preceding season, was sufficient to drive home the fact that violent market fluctuations cannot be averted, and, unless things change radically, must be expected. And the State cannot go cheerily on ignoring the adverse trend because its economic stability depends upon the disposal of its surplus produce in overseas markets. In the chief items of export the bulk of the production is shipped abroad, and that is the reason why the last depression hit this country with such terrible force. If the Government has evolved what it regards as a practical plan for averting the worst effects of depression then an outline of the proposals would enable them to be submitted to careful examination, and constructive suggestion might make them even more effective. There would be the added advantage, if the plans met with general approval, that the people as a whole would face any adverse movements with greater confidence.