The Auckland Star: WITH WHICH ARE INCORPORATED The Evening News, Morning News, The Echo and The Sun. THURSDAY, APRIL 27, 1933. TOWARDS AGREEMENT.

Auckland Star, Volume LXIV, Issue 97, 27 April 1933, Page 6

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

THURSDAY, APRIL 27, 1933. TOWARDS AGREEMENT.

For the cause tfta* Jaefcs assistance, For the wrong that needs retistano*, For the future in the distance, And the good that vz can do.

To the world groping for a way out of its present troubles the joint statement issued from Washington by Mr. Mac Donald and President Roosevelt offers the basis for a constructive and positive plan, and shows that the informal talks at Washington have borne fruit. Not only is there evidence of Anglo-American agreement as to aims and methods, but also there is a simplicity about the statement which adds much to its valued . In brief space it Covers a wide field. First of all, the two leaders affirm the need of an increase in the general level of prices, and . this, they state, is fundamental to progress. It is for such a rise that the. nations have been looking in vain during the past two or three years. To-day, nothing but common action by the principal countries can meet the need of the world, and the declaration by Mr. Mac Donald and Mr. Roosevelt of their determination to advocate such action may be accepted as a good augury for the approaching World Conference. Efforts to raise prices can be successful only if obstacles which exist to-day, in the form of restrictions of all kinds, are swept away or lowered, and it is a further indication of the practical nature of the proposals that they give expression to this need. At the same time, there must be an expansion of credit and currency through the central banks, and the purchasing power thus released must be directed quickly into the channels of circulation aud not allowed to lie idle as it has in the past year. The task of making money, move more freely and of thawing frozen credits may prove difficult, but upon the results of the measures taken to start public and private spending again will depend the effectiveness of the schemes devised to give employment to the worklcss millions and to balance national budgets.

Governments can help in reviving enterprise in two ways—by direct public investment, as in the housing scheme proposed in Britain, or by assisting and encouraging private enterprise. Mr. Keynes and other leading economists in Britain have been advocating larger capital expenditure by public authorities, and the suggestion has been put forward that the Government should case the burden on the Budget by dividing national expenditure into two parts, one of which would represent the amount required for capital works. This capital expenditure, it has been suggested, should be financed by borrowing, and new credit should be thus forced.into circulation. Such a transference from ordinary to capital account would relieve the Budget and, so it is argued, enable the Government to reduce taxation. The risks of a Budget policy along these lines appear to have been too much for Mr. Chamberlain, but there is no mistaking that Mr. Mac Donald and Mr. Roosevelt are definitely in favour of larger public spending. Should their common view,prevail at the World Conference next month there may be some modification of the "grim" financial programme of the British Government,'and, indeed, a more enterprising attitude would be almost inevitable.

There remains the question of an international monetary standard, which at present, due to widespread abandonment of gold, does not exist. It is stated in the Washington message that a new basis for international payments must be devised as soon as possible, and adequate precautions must be taken to prevent a repetition of the recent disastrous mistakes. The position of silver must be considered, and here it appears'there is a disposition to improve the status of the countries in the Far East. A survey of all these problems leaves no doubt of the vastness of the international field or the value of the talks between the leaders of the two nations. The attitude of France and others remains to be learned, but it is not too much to claim that the' progress so far achieved improves greatly the prospects for the World Conference. '