27 AUGUST 1932, Page 12

SAVE OR SPEND ?

[To the Editor of the SPECTATOR.] SIR,--If your correspondent, Mr. Charles Edward Pell, really thinks that the stagnation of employment in this country is to be attributed to a diminutien of Government spending, I am afraid that nothing I can say-will convince him to the contrary. Personally I think that it is almost certain that, if the Government had been spending as before, the recent conversion operation would have been a failure. That seems to follow from general reasoning. But to argue that, in a period of rapidly worsening world conditions, the failure of local trade to revive should be attributed to the measures which made conversion possible, seems to me to be a most flagrant example of the fallacy post- hoc ergo propter hoc. Of course a curtailment of government expenditure means that fewer goods are bought by the Government and a diminution of public works means that fewer labourers are employed in public undertakings. But, in spite of Mr. Pell, it surely does not require a very profound insight to perceive that the reiteration of such identical propositions does not constitute a proof that government economy leads to deflation or that measures which release more savings for industrial investment are inimical to industrial recovery.—I am, Sir, &c., [This correspondence is now closed.--En. Spectator.]