The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo. TUESDAY. APRIL 12, 1927. A EUROPEAN COMBINE

Auckland Star, Volume LVIII, Issue 86, 12 April 1927, Page 6

The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News and The Echo.

TUESDAY. APRIL 12, 1927. A EUROPEAN COMBINE

for the cause that lack* assistance, For the wrong that need* rettitane*. For the future in the distance, And the good that ice can do.

It i< not likely that the European commercial and financial world will take very seriously the proposals put forward by M. Loueheur for a "European economic federation." The ostensible excuse for this scheme is the alleged necessity for defending Europe against American competition. "It Europe is to hold her own against the enterprise and immense wealth of the United States," we are told all the European States imiit unite in a great economic alliance "embracing the abolition of all Customs frontiers.' . This would mean Free Trade for Europe, internally considered, combined apparently with Protection against America. What Europe really thinks about this sensational project we will learn in good time: but meanwhile the assurance that "the entire Press warmly approves it" should be accepted only with substantial reservations.

The idea of "an economic United States of Europe," has been developing on the Continent ever since the Great War. The greatest economic need of all States and nations since peace came has been an assured market for their products. It is because of this necessity that French and German capitalists "and captains of industry," realising the futility of cut-throat competition, have been forming trade alliances which already control the iron and steel industry of the Continent. And no doubt it is the need of markets for French goods more than anything else that has prompted M. Loucheur's last imaginative flight. Further, the emergence of several new States each with separate Customs duties and a fiscal policy of its own, has complicated the whole economic situation since the peace and has made the idea of universal Free Trade within the limits of Europe more attractive and alluring than ever before.

But so far we have been with M. Loueheur, looking at the question from the side of manufacturer and exporter the producer and seller. The industrial masses can buy nothing unless they earn wages; and when we come to consider what -would be the effect upon the vast majority of the workers if the defences that shelter their home markets were swept away and their chances of employment were seriously reduced, we cannot agree to settle the question in M. Loucheur's light-hearted and precipitate fashion. In Free Trade Europe, industries might be redistributed in accordance with the economic principle of localisation, with the effect of depriving many millions in France or Germany or Italy of the opportunity to earn their living in their own country. That was the consideration that so heavily discounted the value of Mr. J. M. Keynes' proposals for the abolition of customs barriers as set forth in his "Economic Consequences of the Peace," and circumstances have not changed since then to such an extent as to secure more gratifying reception for M. Loucheur's somewhat similar scheme to-day.