Saving and Spending
The man-in-the-street finds himself torn between the apparently conflicting demands that he shall save in order to pay for the war and spend discreetly to prevent trades- men from being ruined. Sir John Simon, who as Chancellor both wants our savings and wants income-tax on traders' profits, put the two cases with discrimination in his speech at the Mansion. House. It is clear that the public must keep down its private expenditure in order to enable the Government to spend its savings on the war. It must not make excessive calls upon productive power which is needed for war service. But the change-over from peace to war industry is not yet complete. There are workers still un- employed, and industries not yet working to full capacity. Where producers are still under-employed there is nothing to be gained by restricting the purchases of their goods. Sir John's suggestion that expenditure should be restricted in the case of anything which is made scarce by war conditions is a good working rule—scarcity is generally indicated by prices. Soon, when all the workers will have been absorbed, the demand for saving will become imperative. But if it were pressed too far in this interim period it would simply cause distress.
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