FINLAND'S PROSPERITY

Auckland Star, Volume LXVI, Issue 269, 13 November 1935, Page 15

FINLAND'S PROSPERITY

HOW SHE WON OUT.

NO DEBT-RIDDEN FARMERS. lIELSINGFORS, October 4. Finland lias conquered tlie depression, but unless world trade conditions are improved and the movement towards further restricting imports in various European countries is defeated this country will have trouble in maintaining its present prosperous economic situation, according to Finland's largest banker. He said that Finland was closely following the efforts of the American Secretary of State, Cordell Hull, to abolish the barriers to international trade and they hoped for.the success of the American policy, which will be a long step toward restoring normal trade and liquidating the world crisis. At the present time, lie continued, Finland has paid all her short term credits and half of her long term foreign debts. She has also been able to reduce her discount rate to 4 per cent, which js the lowest it has been since 1896. Tho large investments in modernising her industry, especially paper and wood pulp mills, made before the depression, have begun to prove profitable and her exports upon which her present prosperity depends are steady but slightly less tlian last year. This is not expected to hurt the country's economic position, since Finland during tho past Ave years has cut down her former large imports of grain. Tho banker reports that the country can now produce enough rye to satisfy her requirements and within five years she will no longer need to import wheat. "The depression hit Finland before the other countries when the Soviet Government began to dump timber products in 192(5-27," he explained. "A building boom also collapsed and tlie country passed through a period of deflation. Tho Government set the example of reducing its expenditures and tho Budget was balanced to meet the decreased income by radically reducing wages of Government employees and also decreasing expenditures. "We also believe that debt-ridden farmers are the most dangerous citizens and tho policy of the Government has been to decrease the farm indebtedness rather than loan the farmers more money. We believe that farming is not a business, but a living. This policy, wliilo it caused some distress among farmers, proved a success for to-day 50 per cent of Finnish farms are out of debt and only 7 per cent are mortgaged to a sum amounting to 50 per cent of their assets." This banker, who dirccte the policies of tlie Finnish State 3ank, believes that ono of the immediate-canoes of the international crisis was the international credit inflation. Now, he believes, each country has to take an account of their losses and pocket them and start doing business again on a. cash basis.