Private and public discussion is still going on about the scheme of compulsory savings produced recently by Mr. J.M. Keynes. His initiative has already proved useful in drawing attention to the urgent task of averting an inflation, or, more correctly, of ensuring that the increased expenditure of borrowed money by the Government is not translated into extra private consumption of goods and services, which would mean increased competition for an unchanged or reduced total of supplies, resulting in higher prices.
The problem is not yet dangerously acute, because there are still many idle hands and machines, but, even so, a substantial increase in both prices and wages has already taken place. It is generally admitted that the appeal for subscriptions of the new savings certificates and small bonds, though a necessary part of the financial scheme, can have only a limited effect on the personal expenditure of the great mass of the popula-tien. Men and women of the working class, who buy three-fifths of all consumption goods sold in this country and will buy a large" proportion as wages rise and other income remains stationary, do not mùch like to put by pennies and shillings at home for weeks before going to the Post office when they have saved 15s, for a savings certificate. One of the first things to be done is fo bring opportunities for saving more closely within their range. Savings stamps of 6d., 1s. 2s. 6d., and so on must be created, whether for voluntary or compulsory contributions.
The Bogey of Compulsion It may be suggested that the compulsion proposed by Mr. Keynes is not really essential to his plan. Not that compulsion to save is wrong, but it may not be the most effective method. The general outcry against this feature is merely foolish. Those who suggest that the voluntary loans of the last war were successful enough forget that they were in fact a colossal failure in that the cost of living was trebled and social distress and unrest persisted for many years after the war, Others who vaunt the people's craving for liberty overlook that few workers would like to see the compulsory National Insurance scheme, she closest parallel to Mr. Keynes's plan, abolished. Is taxation resented because it is compulsory? Are not all men between 18 and 40 years of age Mable to compulsory service at soldier's pay? The country is at war. Already the exceedingly profitable terms which the Chancellor has offered to the small investor particularly in the case of the new 3 per cent. defence bonds of £5 each, seem to have encouraged large investors to hope that they, too, may be allowed to lend to the State at their own price. Such hopes explain at any rate in part the stagnation of business in Government securities a few weeks ago. Those who object to financial compulsion should consider this aspect of liberty.
No doubt the great bulk of the loans needed must be raised by voluntary subscriptions, The real objection to compulsion for a part of war savings is that compulsion always fends to undermine voluntary effort. But a degree of pressure or temptation added to the appeal to patriotic duty might achieve the object of retrenchment without drawbacks. Use n be made of the old principle of tracting out" by paying a proportion of wages, salaries, interest, dividends, and payments on Government contracts in various forms of tax or loan certificates unless the claimant demands cash, stating reasons. Many people are already committed to expenditure on education, hire purchase, etc. close to the limit of their ipcome, and forced saving in their case uld mean repudiation of contracts h loss to others. Again, many incomes will be falling or stationary, whereas others will be rising. Some reduction in persona) spending must be imposed upon 9%, whether: by saving or by higher prices, but in order to prevent prices from rising the chief tosk is to prevent extra war earnings, small and large. from being spent during the war. Some catchment for these must be devised before long, compulsion or no compulsion.
Text read from the printed page and cleaned; old type leaves the occasional error.