VOICE OF THE WORLD

Evening Post, Volume CXV, Issue 94, 22 April 1933, Page 16

VOICE OF THE WORLD

"While it is the business of a debtor to pay, it is the business International of a creditor to receive, Dobts. and if a debtor is prevented from paying by the actions'of his creditor then it be tomes a creditor's default and not a debtor's. Once this is generally realised v great step towards economic recovery will have been taken," the city editor of "The Times" wrote recently. "A country which desires to have a favourable trade balance of more, than a purely nominal amount such as can be satisfied by a small shipment of gold must import securities—i.e., invest abroad for the amount of the difference If this had .been realised by creditors for war debts and other exotic payments, those debts would have been scaled down earlier and the gold, standard might not have been broken down by their weight. The fundamental importance of lending by creditor countries is clearly brought out by what has happened since sterling parted with gold Debtor countries could not pay their dobts to England when sterling was on gold because of the scarcity of. gold, which had been cornered by a few countries, but they have not been able to pay any more easily since, tho nvimbei of "foreign defaults and restrictions on exchange having increased in the past year. The reason for this is that

foreigners can • only obtain sterling either by borrowing it or by selling goods and services to this country. The selling of goods and services in checked by the tariff, while tho borrowing of sterling U prevented by the Treasury embargo. Not until foreign lending is resumed can this country achieve a favourable trade balance. The best it can hope to attain is an even balance. » • • The refusal of the Governments .to do what every expert had Economic declared must bo done if Disease. prosperity was to be reestablished had ended by reducing the world to economic chaos, by making the economic confusion which tho war produced, already bad enough, worso. confounded, said Sir Norman Angoli, in a lecture recently. If Governments had not thus consented to follow the wrong policy, if they had insisted upon following the right, they would have been torn from power by angry electorates who were sure that they knew better than the financial experts in financial matters, better than the economists in economics. "While doctors disagree upon the measures necessary to prevent plague and cholera; and though they cannot cure those diseases they can prevent them in large part," said Mr. Norman. "So, the economic doctors disagree on many things, but on thoso measures which might have prevented much of the economic disease from which we have bnin wittering, they do not disagree at all; and though it is extremely difficult to <"iirc depression or financial disorder once confidence has been lost, thoso things can, in large measure, be avoided. . . .An educated man certainly ought to be able to understand why the vast sums involved in debts or reparations can only be paid, in goods or services; but we know as a matter of fact that vast numbers of ed.ucntcd people do not understand it, nnd unless our democracies are to go smash, education must somehow mnnnire to make that kind of problem something which the millions can grasp." ♦ » . ■■■■.• "There is no mystery as to what caused the European flight of Switzerland's capitnl; insocurlty, Example, coupled with the tremendous burden of taxes imposed upon capital in all the Central European countries. But that this capital went to Switzerland is significant," says Mr. George Gerband,i writing in the "North American Review." "First there is the security of investment in a well-controlled market. And, second, and of no mean import, there is the low rate of taxation. It is upon this background that Switzerland grew, without any apparent intention of her own, to be a first-rate financial power. It is the story of a nation which has, through sound economic principles and unswerving neutrality, in politic.s as well ns in finance, built up a confidence which

(now has brought its rewards. Tho principles Ilmt have guided this little country with its few millions of inhabitants may well be studied by the rest of the world, and principally by tho great Powers. In spile of many attractions inviting large-scale production, ! Switzerland has remained essentially what she always was: a country cater-; ing to the needs of the world as they are, not as she might choose to see, them; making a living as best she can; : refraining from wild speculations; adhering to old and sacred principles of i conservatism. Graft and corruption are unknown in Switzerland. Her credit' status is of the highest. She has not I tinkered with tariffs, but believes in ' live-nnd-let-live. And. with all her modesty, she has come to national glory and international repute." » * • ' "It is the greatest possible mistake • ever to let either an Slowly Pulling undue optimism or an Through, undue pessimism get a" hold of you, because tho one has a blinding and the other a strangling effect," said the Prince | of Wales ..at the British Industries Fain dinner. , "I believe that, because of the-world-vide determination to apply tho correctives needed to bring about the long-delayed revival of trade, there

is, despito setbacks, a' growing feeling of confidence.! ..If the paradox of millions of people haunted by poverty and demoralised by lack of employment, while living in a world rich in actual and potential resources, is to bo destroyed, this .determination must never flag, and it must be world-wide so that confidence miiy one day be world-wide again. Haiids have not lost their cunning, nor ljrains their fruitful capacity for new and profitable ideas. We are pulling through slowly, but in the process there must be no narrow nationalistic exclusivencss. The doctrines of economic self-sufficiency and excessive ■ nationalism spell disaster ,in the changing conditions of modern life. No individual producer, no industry, and no nation can command economic destiny sin-glc-liandcd, nor can it pull through akmc. All the nations are realising more and more that they are economically interdependent, but, in spite of this encouraging fact, wo have not as yet' found a fully effective form of international co-operation nor a practical way to reconcilo limited consumption withi unlimited production. We in this country feel that we are now building strongly for the future, for our tradej, and for world trade. We must no ilongcr be influenced by the bitter remembrance of the unfulfilled hopes add disillusionments of recent years. We must try to look forward with our. heads up and our tails up, not with: a slack optimism, but with sane wisdom, confident that our full' recovery in world trade must be slow, yet the more likely it is to bo certain and. lasting." * # ..'...# I Speaking on "Popular Fallacies," in a 1 recent broadcast address, I Machines the president of tlio New j and Men. South Wales Chamber of i Manufactures (Mr. H. j Gordon Bennett) said that the introduction of labour-saving machinery into industry had created unemployment. The same cry was raised by the Luddites in 1811 and 1812. History had pro-! vided an answer to the Luddito arguments, for the population of Europe' had increased from about 150,000,000 at that time to»450,000,000, and modern industry had found employment for this vast increase of population. Mr. Bennett niffinned that every new invention and improvement in technique leading to the installation of labour-saving I machinery had placed within, the pur-1 chasing power of the masses 'commodities which previously they had been ;unable to afford and created new demands to fulfil which the services of millions of workers had been required. Machinery had enabled the cultivation of land which would not afford subsistence to the labour necessary to work it liy manual power. It had cheapened production, increased demand, and providjed comfort, entertainment, and employment for hundreds of millions, who would never have been' born had the worjld still depended upon manual labour. ■