The Press FRIDAY, SEPTEMBER 13, 1935. Great Britain Stands Firm

Press, Volume LXXI, Issue 21577, 13 September 1935, Page 12

The Press FRIDAY, SEPTEMBER 13, 1935. Great Britain Stands Firm

j Sir Samuel Hoare's speech at the opening, of ! the session of the League Assembly is probi ably the most uncompromising declaration of | faith in the League and determination to abide ! by the covenant that has been made by the representative of any great power since 1919. But its value in the present crisis does not lie solely or even mainly in the added strength it must give to the collective system. The griev r ance of Italy and Germany against the League ', covenant is that it is essentially an .instrument I fo:' preserving the status quo. And though the grievance has been exaggerated, it must be admitted that: the emphasis laid by the coven-, ant on the sanctity of* treaties and the territorial integrity of existing states is in striking contrast to the vague and unsatisfactory provisions for treaty revision. Italy was legitimately disappointed with the post-war settlementrand suffers severely from lack of raw materials. She is therefore reluctant to regard present European boundaries and the present disposition of colonial territories as permanent and sacred. Sir Samuel Hoare indicates, by inference, that his Government recognises this defect in the covenant and realises that Italy's expansionist urge is in part due to. her desire to increase her resources of raw materials. Further than that, he pledges his Government to accede to any request which may be made for an investigation into' the distribution of natural resources and to take any reasonable steps that may be found necessary to correct inequalities. At the same time he suggests very sensibly that the disabilities suffered by countries without adequate supplies of raw materials within,their territories have been exaggerated, since some of these countries have, by trading freely, overcome their disabilities and achieved a high level of industrial development. The truth is that Italy's economic difficulties are very largely of her. own making. Between 1927, when the Italian currency was linked to gold at an absurdly high parity, and 1934 costs .in Italian industry were so high that exports declined steadily. In 1934 the attempt to meet the situation by deflationary measures had to be abandoned in the face of increasing unemployment, and behind a barrier of exchange and import restrictions a policy of internal Inflation was inaugurated. By this means unemployment has been reduced at the expense of a heavy drop in imports and a consequent shortage of raw materials. Devaluation of the lira and the abandonment of exchange restrictions would enable Italy to acquire the raw materials she needs much more rapidly and cheaply than would the acquisition of territories in northern Africa. Indeed, it is quite certain that the economic benefits for Italy of complete Control over Abyssinia would be small by comparison with the cost of conquering the country and administering it.