BANKER'S REVIEW

Evening Post, Volume XCVI, Issue 137, 6 December 1918, Page 3

BANKER'S REVIEW

NOW THAT THE WAR IS OVER PROBLEMS TO BE DEALT WITH SETTLING WITH GERMANY. The war and its attendant financial and other problems were dealt with at length by Mr. Harold Beauchamp, Chair- , man of the Bank of New Zealand, at the half-yearly meeting of that inatitu- | tion, held to-day. . ■ I After brief reference to the influenza scourge (reported elsewhere), the Chairman proceeded : "The war is practically at an end, and the fact comes as an immense relief to the whole world—firstly, becauae the ideals of national liberty have been preserved; secondly, because the Gorman theeis that 'might is right,' has been disproved j and, thirdly, because an end has been put to the destruction of human life. Efforts will no doubt be made to estimate the value of the services, rendered by the several Alli«s, and the factors that have directly contributed to the Allies' success. In any such estimate or comparison, the services of Great Britain and her overseas Dominions must receive adeqnate recognition, and, above all, due credit must be given to the British Navy. When the war began Britain had the most powerful navy in the world—as powerful as the next three navies combined. The whole issue of the war depended upon the Navy's alertness and vigilance; and it is gratifying to note that at no period of the four years of hostilities was our Navy ever found to be wanting. It constantly maintained its supremacy, fully justifying the confidence that Britons have always placed in it, and the Germans' hopes of victory were consequently always impossible of realisation. The record of its expansion and of ths work it has accomplished is a marvellous one. At the commencement of the war, the British Navy represented a tonnage of two and n-half millions; now it is eight millions. Every trade route in the world has been carefully patrolled, by its ships, and, notwithstanding the most determined and unscrupulous efforts of our enemies, the sea has been kept open to all the commerce of the world. - In the month of Juno last, the ships of the Navy steamed eight million miles. SERVICES OP THE NAVY. "The number of men required to man and maintain the. Navy and the mercantile marine during the close period of the war was at least one and a-half millions, of whom from eight to nine hundred thousand were men of military age. We in Now Zealand should specially appreciate the invaluable services rendered by the British Navy. Our trade routes were menaced, but never blocked, by the enemy; and at no time during the whole period of the war was our produce held up through direct enemy action. It is pleasing to note that the wool-growers of New Zealand, in order to show their appreciation—if only in a modest way—of the debt they owe to tho mercantile marine, v;Jio, like the j Navy, have rendered such magnificent | service throughout the duration of the war, have assigned hrlf their surplus profits from wool for the benefit of our gallant sailors. "When we, turn to review Britain's efforts on land, the fact should be empliHsised that we were lwver a military nation, in the sense thai the-nations of the Continent —and especially. Germany —were, and Britain had no recent experience of conscription. • The British Army was the smallest army maintained by any great. Power in Europe; and, in any prewar discussion on the matter, there was,never any idea that Britain would ever be able 'to omplcv a greater force than six divisions. Britain, however, raised'for her Army and Navy 6,250,000 men—most of them by voluntary recruiting. In order to give some idea of what, this mean?, I may say'that if the United States of America had called to the colours the same number of men in proportion to population, it would have meant an'army of very nearly 15.000,000 men. The Dominions contributed about 1,000,000, and India .about 1,250,000 men, since the beginning of the war. Though admittedly not a military power at the opening of the war, it will be seen from the foregoing that Britain certainly became one shortly afterwards. The six divisions sent to France in tho early days of the war, which were slightingly referred to by the Kaiser as 'Genera! French's contemptible little army,' punished the Huns mercilessly at Mons, Le Cateau, a.nd on the Marne; and the Kaiser's 'royal imperial command' to his troops to 'march over' them was never carried out. They now glory in the title of 'The Old Contemptibles!' "Britain's Air Service was negligible in 1914: it is now one of the largest, and probably the most efficient, in the world,, and Bi-itish. airmen have played 1 a very prominent part in the war. • STRENGTHENED RELATIONS. "The effects of the war on the British Empire itself have been in many ways beneficial. Its constituent Dominions and Dependencies have been drawn to the Motherland and to each other in a way that nothing else could have accomplished; and a welding of interests and sympathies has taken place that will, I.believe, endure for all time. The Dominions have been acknowledgedl as partners in the great British Empire, and they will, in the immediate future, exercise an influence in shaping its destinies. Surely we may now look for a relationship more intimate than heretofore between the Motherland and the Dominions —a relationship that should assist in the attainment of that era of peace, ha-ppi-nuss, and prosperity for which v;e all e^ fervently long. And in. the-eves of the' world,, the prestige of tho British Empire is greater than ever. "But the development which I regard as of the highest importance and as the occasion for the most profound thankfulness is tho rapprochement which the war has brought about between ttw two great English-speaking peoples—the United States of America and the British Emfire. I may be classed as a visionary, but I hold to the view that the destinies of the world will'He in the hands of these two great democracies, which will have to shoulder the responsibilities of preserving the liberties.of the nations, large .and small, of succourine the smaller nationalities, and of policing the world. They have not sought this leadership, but it is theirs by virtue of their ideals of liberty, justice", and humanity. GERMAN COLONIES IN PACIFIC. "Following the close of the war now comes-the difficult task of arranging the terms of peace. In this connection it is gratifying, -to note thn,t tho representatives of the Dominions will have seats at the Peace Conference. One of the outstanding questions for Australasia is, of cour.se, the destiny of the German colonies in the Pacific. These cannot, and must not, be returned to Germany, to become in the. future bases for submarines and aircraft, and therefore a menace to the peaceful development of .he British Dominions in these £eas. There are, of course, other matters of great moment in which we ure interested, that are boiind to be discussed at the Peace Conference; but the determination 'of the disposal of the German colonies in the

Pacific is, to us, a very important question. Australian arid New Zealand statesmen are, happily, unanimous on this point. ' " The active work of repatriation, restoration, and reconstruction must now bo undertaken, and the greatest intelligence and the greatest organising ability will have to bo utilised for this purpose, for at every step complicated and eerious problems are bound to present themselves lor solution. It seems to me that the transition period will be no less trying and anxious than the war period has been; and the best efforts of every j individual in the community will be needed to maintain the economic machinery in smoothly-running order." THE WAR DEBT. Mr. Beauchamp than dealt with New Zealand's prosperity, of which he foresaw no immediate variation, and passed on to the Dominion's .financial, obligations. "One great burden tljat the war has 'forced upon .us (he said) is a huge public debt. The Minister of Finance has repeatedly stated, since his return from England, that the public debt is , about £200,000,000. This at 4£ per cent, means an interest bill of £9,000,000 per annum, or say £750,000 a month; and there will be, in addition, the heavy pension bill to meet. These two'items will I absorb about eleven millions to twelve millions a year. This is a very heavy load for the country to carry, and it necessarily means that taxation must for some time be heavy. There is, however, one feature about the debt that redounds to the credit of the people. A large proportion of the money required for the prosecution of the war was obtained within New Zealand. It was re- , cently stated officially that the amount of I the war loans raised in the Dominion was equal to about £40 per head of the population, a truly magnificent achievement. 'Well as the people of New Zealand have done, the people in the British Isles have done infinitely better. The Chancellor of the Exchequer the other day obtained a credit vote of £700,000,000, which does not represent, the end of such votes. With this vote, the total is. brought up to the huge sum of £8,742,000,000, made up as under: — Year. £ 1914-15 362,000,000 1915-16 1,420,000,000 1916-17 2,010,000,000 1917-18 2,450,000.000 1918-19 2,500,000,000 58,742,000,000 | "The debt due to Great Britain from the Allies on Ist August was £1,402,----000,000, and from the Dominions £208,----500,000; and both amounts would be considerably larger now. It vias officially stated in the House of Commons that the National War Debt on 50th September last amounted to £6,875,000,000; and there is the recent credit vote to be added, which would bring the total to £7,575,000,000. It will probably take another £500,000,000 to repatriate the troops and for restoration, compensation, etc., which would make the National War Debt about £8,000,000,000. Of the amount due to Britain from the Allies and Dominions, £1,C00,000,000 is regarded as gcod, and this would leave the debt at £7,000,000,000. The interest bill would probably total £315,000,000, which, with the amount required for the normal peace expenditure, would mean raising a revenue of £600,000,000—0r three times the amount raised in the peace. year of 1913-14. The people in. Britain will be unable to indulge in any extravagances, and will be unable to afford any fancy prices for foodstuffs or for anything else. And this state of affairs is likely to continue for scone time. But there .will, I anticipate, be no sharp or sudden decline in the prices of our produce or, on the other hand, of the commodities we import. WORLD-WIDE SHORTAGE. "As regards imports,' there is more likely to be an upward rather tha.n a downward tendency, for a time at least, in the cost of commodities that are imported into this country. There is a world-wide shortage of standard goods and of raw materials, and these cannot be produced in sufficient quantities to meet, all demands for a very long time, so that values, when they do recede, will i do so gradually. Furthermore, so far j as New Zealand is concerned, there will bo a considerable difficulty in importing goods from Britain because a large proportion, if not the whole, of our steamers will bo needed for the repatriation of troops. Merchants and importers are seriously urged to study the position carefully, and they will realise that there is no reason Whatever for anything in the shapa of a panic. The situation is an unfortunate one for the general public, for it means that the cost of living will continue high, though .perhaps not quite so high as at present. High rates of freight as compared with pre-war days, increase in prime cost, and difficulty in procuring, will still operate in respect of imported goods and help to maintain values; while the prices of the foodstuffs which we ourselves produce are unlikely to fall for some time owing to the strong demand there will be for them to feed the starving millions of Europe. The same set of conditions will operate in Australia, Canada, South Africa, and India, so that the people of New Zealand will have no monopoly of complaint about the high cost of living. As a matter of fact, the cost of living in New Zealand is relatively as low as, if not lower than, in the Commonwealth, and certainly lower than in European countries. In. view of all these circumstances, it is to be hoped that the imperative necessity of making the I offending nations bear a, substantial portion, if not the whole, of the war costs entailed upon the Allies in defeating their nefarious designs will be strenuously insisted upon at the Peace Conference. There should bo no false and foolish sentimentalism or nambypambyism when settling scores with the German nation. Decent disclosures prove beyond all possible doubt that Germany was the. veal "instigator of ,the war, and had made complete plans towards that end some time before the actual declaration of hostilities. It is therefore to be sincerely hoped that the abject appeals which the Hun i 3 at present making.to secure mitigation of the just punishment that is impending for his misdeeds will fall upon deaf ears, and that the Allies will bo inexorable in their terms. IF THE GERMANS HAD WON? "What, I ask, would have been the fate of the British Empire if the Hun, instead of being defeated, had been victorious? Let me quote an extract from the letter of a leading German—tho lato Herr Ballin—which was telegraphed out to the press quite recently. He wrote a. few days befo»; his death* discussing the forecasts of the armistice terms, which, he admitted, were unexpectedly moderate, nnd remarked:—'lf we had been the victors we .would have demanded the occupation of London and Paris, dictated terms at Buckingham Palace, and annexed the entire Continent between the Urals and the Bay. of Biscay.' Let me also remind you of the iniquitous exactions to which poor Belgium has been, subjected in. order to provide for the maintenance of an army of occupation, which by all the laws of right and justice should never have been in Belgian territory at all. Unquestionably upon the British Dominions grievous burdens would have been laid. In these circumstances, therefore, there need be no hesitation on our part in demanding what is obviously only fair and just to ourselves and our Allies. Much will be made of the fact that Germany is financially in a bankrupt state, and unable at present to pay indemnities. That may be true; but if so, it is Germany's Concern. She has

I brought it upon herself, and can therefore be left to find a way out of her own embarrassments. But Germany is not bankrupt in resources. She is rich in natural wealth, and my firm opinion is that that natural wealth should) be charged with the burden of the debt which the civilised freedom-loving nations of the world have had to incur to protect their liberties against German aggression. WHAT SHOULD BE DONE. "It should he arranged that specific I taxes should be levied upon all Germany's primary products to provide for payment, within a reasonable period, of the Allied indebtedness, together with the interest thereon. _ In this wa.y, the magnitude of her iniquity and the inevitable consequences of crimes such as those of which Germany has been guilty, would be kept alive in the German mind for probably the next century, and would furnish one of the best guarantees against any reversion to militarism by the German nation. By the time her obligation had been discharged the triumph of democracy would be complete. My opinion is that the British Dominions, at any rate, should unequivocally demand to be indemnified against the liability which German greed and rapacity have forced upon them. If the wealthiest members of the Allied family desire to display generosity to the German nation, they can, of course, make any sacrifice they wish on their own account; but as far as the Dominions are concerned, full indemnification should be afforded. < FINANCE NOT THE ONLY POINT. "The financial aspect is, moreover, not the only one that calls for consideration. Here, at this trysting-place of the ages, etand outraged justice and afflicted Humanity, appealing to the champions of Right—Justice demanding vindication of her honour, and Humanity crying out for redress of her grievances. The victors cannot turn a deaf car to their appeal. Those responsible for the perpetration of the countless inhumanities, barbarisms, and Iniquities that have made this war a horror of horrors, should be arraigned at the bar of an international judicial-tribunal, and receive, from that august Court the last punishment of their offences. The exalted station of a culprit should have no influence upon the decrees of such Court. The braggart and blaspheming 'All Highest,' if shown to be responsible, should receive the same treatment as the lowest common soldier. Thus we shall perfect the work which our gallant dead have had to leave unfinished, and fill up the measure of their sacrifices, so that the splendour of their completed achievement shall go down with undiinmed lustre to a' grateful posterity, and shine for ever with an imperishable glory." A DEMAND FOR JUSTICE. Mr. William Watson, a director, subsequently laid it dowri"""that it was important to the bank, as it was to shareholders in their private capacities, that restitution should be made by the enemy not only of the money of which they had been depleted by the unprovoked war, but to provide the pensions and other demands consequent upon the deaths and other war casualties. It was beside the question to argue whether Germany could, or could not, pay these just claims. No such argument was entertained by Germany when she bled France white, besides taking Alsace and Lorraine from her, in 1871. Neither was the Boxer ind?mnity" remitted because China was unable to pay; on the contrary, her revenues were taken as security. • It was nonsense to say that milder measures should be adopted towards Germany with Her large resources, and her people, who, Socialists and all, supported the war and all its frightfnlne6s with bravado as long'ag they hoped to gain by it, and only changed to whining after defeat. It would'be extremoly unjust that they in New Zealand and tlieir descendants should be saddled with the debts and taxation caused by the war, as well as having to endure the 1 loss of those who could never be replaced. He trusted that New Zealand's delegates to the Peace Conference would use their best endeavours to see that justice was done.