PROBLEMS TO FACE

Waikato Times, Volume 127, Issue 21246, 17 October 1940, Page 8

PROBLEMS TO FACE

REVIEW BY COMMITTEE LOSS OF MEN TO INDUSTRY I CRUELTY OF INFLATION (Special to Times) WELLINGTON, Thursday Before making its recommendations there are some general observations the committee desires to make, stated the report of the committee of the Economic Stabilisation ! Conference today. I (1) New Zealand, along with j Great Britain and the other Dominions, is engaged in a struggle j for national existence against the agI gressive military dictatorships now i established in Germany and Italy, and in defence of our cultural standards, our traditional liberties, and our manner of living. The war has not affected us to the extent that it has our fellow-countrymen in Great Britain, but inevitably its effect upon ourselves must increase. Thus, the citizens of New Zealand, engaged in a war of survival, will understand and loyally accept the fact that the country cannot live in the same manner as in time of peace. It is imperative, therefore, that all 1 sections of our people should work hard, and work wholeheartedly in • co-operation, for the purpose of winj ning the war. All the strength we possess, all the reserves we have to I call upon, all the energy we can put j forth, all the moral and material i forces of our people, are needed to j forge the weapon by which the ! enemy may be beaten. The concentration of the people on this predominating and imperative aim necessarily places other aims and objects into relative and subordin- | ate positions, since without victory all else becomes futile and meaningless. 50,000 Men Withdrawn j (2) The sending of an Expeditionary Force overseas and the training o.t men in New Zealand have entailed the withdrawal of over 50,000 men from normal production, and mean- ' while their productive capacity has been lost to New Zealand. To these must also be added the engaged in production for ; war purposes. Moreover, although they are no longer engaged in production, the members of the Armed Forces are still consumers, and, unless the production lost can be made up by those remaining, the standards of living of all will be reduced. However, there must always be provided for everyone enough food, clothing and shelter of the best possible quality, in the greatest quantity the country can afford. It is the duty of all to do their utmost to keep that basic standard , of quality and quantity at the high- . est possible level. 1 (3) The committee has not tried to decide as between conflicting theories of political economy, but its recommendations are a reconciliation, for war purposes and for the war period, of different points of view, i (4) Dominating the deliberations of ; the committee has been the common i opinion that each interest should ask «what it can give for the common j cause rather than what it can get for j itself. For Period of War (5) The committee’s recommendations are emergency recommendations made for the period of the war, j and made to provide for problems, | conditions and difficulties arising i from the war. j (6) The first charge on the proi duction and income of the country j must be the prosecution of the war ! (including, of course, the mainten- | ance of the armed forces here and ! overseas). (7) In addition we must not merely maintain but must increase proI duction of every kind, as goods, and j not money, represent the real wealth !on which our standard of living de- : pends. j Some of the difficulties confronting | the country today are these: (1) As stated above, the members lof our armed forces, who were producers of goods and services, have been withdrawn from production for the defence of the community during the war. The numbers in the armed forces must continually increase, and we have to maintain them both here and overseas. The rest of the community must either make up the deficiency in production, or go without to the extent that the deficiency is not made up. Some imported goods and basic raw materials, for example, cannot be obtained at all from any source; while others are in short ; supply at high and increasing prices. ' Reciprocal Arrangements (2) By arrangement with the Brit- j ish Government, for the duration of \ the war the prices of New Zealand J exports are being fixed from year to ;

year, yet we in New Zealand have to pay for our imported goods at increased. and ever-increasing market prices. The committee suggests therefore that the Government should further explore the possibility of making reciprocal arrangements in regard to the prices of imported goods that are essential for productive purposes in New Zealand. (3) At the outbreak of war this country was in a transition period. ! Our secondary industries were being ! expanded and some new industries were being established to produce goods not previously manufactured in the Dominion. The purchase of capital equipment necessary for this development made a substantial call on the country’s sterling funds, thereby reducing the amount of funds available to pay for imports of consumer goods. These industries, however, have not yet been sufficiently developed to supply all the requirements of our people. Danger of Inflation (4) Prices have risen, inevitably leading to a demand for wage increases. Higher rates have been granted, in some cases for special reasons, and there has been a general increase of 5 per cent in the wage rates covered by awards and industrial agreements. (5) In a war situation there is always a danger of inflation of the currency being resorted to as an easy method of meeting, or partly meeting, the increased financial commitments made necessary by the war. The evidence before the committee indicates that there is a tendency for the purchasing power to exceed the value of the goods available for con-