The Press MONDAY, JULY 31, 1933. Economics of Empire.

Press, Volume LXIX, Issue 20921, 31 July 1933, Page 8

The Press MONDAY, JULY 31, 1933. Economics of Empire.

The statement signed by the British Empire delegates to the World Economic Conference is like most of the documents which emanate from gatherings of Imperial statesmen: it expresses a compromise covering many diverse interests and viewpoints, so that what it says is sometimoß less important than what it does not say. For instance, the delegates begin by declaring bravely that "tho. Ottawa agreements have " already had beneficial effects on " many branches of inter-Imperial "trade." If the delegates were sincere in this pronouncement, it seems reasonable to ask why they do not urge their governments to continue and elaborate the work begun at Ottawa. It is equally significant that the word "quota" does not occur once, although it has been in the headlines of every newspaper in the Empire for the last two months. More than that, the statement contains not one sentence or phrase which commits either the British Government or the Dominion Governments on the quota issue. It would be wrong to suppose, however, that because the statement is purposely silent on what are for the moment the most important problems of intra-Empire economics it is therefore nothing more than a string of platitudes. On the contrary, the passages dealing with monetary policy are highly important; and the Dominion delegations may well feel pleased that they have succeeded in inducing the British Government to reaffirm its determination to take active measures to raise sterling and, if possible, gold prices. The threat of quotas will lose some of its terrors for farmers in the Dominions if they can be sure that Great Britain has not embarked on the disastrous policy of attempting to force up prices merely by restricting supply. It is possible to wish, however, that the British Govcjnment had given some more specific indication of the methods by which it proposed to increase prices. The delegates, thinking probably of the Keynes plan, declared unequivocally against " the inflationary crea- " tion of additional means of pay- " ment to finance public expenditure " and pointed hopefully to the apparent success in Great Britain during the Inst few months of " the policy of •" cheap and plentiful money." But it is too early to assume that this policy has succeeded; and it is significant that economists are tending more and more to tr Q view that the provision of cheap money will not raise prices substantially and permanently unless accompanied by measures to force money into circulation. In another respect also the monetary passages in the statement are unsatisfactory. Clearly the delegates were unable to decide whether exchange stability or price stability is the more desirable object; and they therefore sketch a policy which seems to involve pursuing both objects at once. It is true that, over the long period, price stability, far from being incompatible with exchange stability, is the only sound basis for it. But it is also true that, in devising an immediate policy, a government must decide which goal it will strive to reach first. The statement seems to find some virtue in the British Government's refusal to disclose the aim of its monetary policy and suggests that this freedom from commitments will make other countries more willing to join the "sterling group." The suggestion does not seem well founded. No country will be anxious to join a monetary group which, not sure what it wants most, pursues several courses tentatively and timidly.