ROOTS OF EMPIRE

Evening Post, Volume CXVII, Issue 51, 1 March 1934, Page 13

ROOTS OF EMPIRE

A FIRST NECESSITY

SOUNDNESS OF FINANCE

WAR DEBT BURDENS

(SpeciaKto the "Evening Post.") :. AUCKLAND, This Day. Sound finance as a first necessity for Imperial stability and prosperity was discussed by the- Hon. A. Shaw, chairman of the P. and 0. ' Company, iii an address on tl Three Roots.- of Empire," at a luncheon given in his honour today by the Auckland Chamber, of Commerce. Describing the first root of Empire as finance, Mr. Shaw referred to the economic position created through the piling up of staggering war debts dur- , ing the Great War. The British Empire to its credit, he said, had avoided superficially attractive financial expedients to get rid of its burden, and had kept the faith. So far as the condition of the world at1 large would allow, it was striving, to repair the ravages of war by thrift and hard work, by balanced Budgets, and the avoidance of wild-cat schemes of inflation, however skilfully disguised. PAEITY WITH STERLING. Mr. Shaw, while making it clear that his observation was not put forward in any sense as a criticism of 'action which the Government of New Zealand had taken with its wide knowledge of the conditions and requirements of the Dominion, said he felt sure that everybody in New Zealand would agree with him that there were great advantages for the whole Empire in having a currency securely-based upon parity with British sterling. It must, of course, be for those responsible to take action, as and when convenient, and desirable in the interests of the people they represented,' to secure the undoubted advantages of a common basis. You may be perfectly certain of this, that no. pressure will ever /be exerted in any quarter of Great Britain to hasten the attainment of that common basis in the face of the requirements and desires of the people in New Zealand. ■; ; •He stressed the fact that the return of abundant prosperity to peoples of^ the Empire depended very largely upon the world outside. .' ■ :'■■ r, AMERICA'S ATTITUDE. Dealing with the economic dislocation caused by tariff barriers and other restrictions to trade, Mr. Shaw quoted the "classic- case of the United States of America, whose ideal •■ sometimes seems to the bewildered observer to be that she should export her goods and services enormously and import nothing in return except perhaps gold." Gold is a standard of value and a convenient means of settling small balances, in the international exchanges," he said. "But when it is sought to make gold more than that, then very inconvenient consequences swiftly follow. America has experienced, and is still experiencing, some of these'consequences.: It is quite true that so long- as gold is allowed freely to circulate through the world, it may, though to a limited extent, redress balances of international indebtedness. But to bottle- up gold, and to shut out goods and yse^vices,, and yet- to . insist upon the payment "of foreign 'debits/.is to make a demand which no economic machine is capable of fulfilling. ' The position with regard to -America was further, aggravated by thestill unsolved problem of the enormous war debt'owing to her by Europe, Mr. Shaw continued. By an entirely new economic expedient not known in any previous war in- history the assistance rendered by the Allies to America while that country was in the war, but'not in the field, was not paid for by her by subsidy, to aid her Allies-, (as would have been, the precedent from other, great wars in history), but was actually made the ground of a very large claim by America for the tools required to do her business before she. was ready to do :it herself. In the Great War the sound precedents of history were reversed and the ideals of comradeship in a common cause debased. arid commercialised;1 '■":■■■.■ . •"• "..'.' •.■•■•■- A CARDINAL MISTAKE. . "The results of that cardinal mistake have .dislocated the mechanism of ■international exchange. They have created a vast unpayable debt- —unpayable but yet strenuously demanded— whose menace has so crashed the means of exchange that token, payments only have had to be made and accepted in order that the economic machinery of mankind may work with some remote semblance to smoothness. Speaking for myself alone, I venture to think that no very substantial recovery of world prosperity can take place until two fundamental facts have been realised and acknowledged on'both sides of the Atlantic. The first fact is that the attempt to pay that debt, however willing we are to do so, is inconsistent with the interests of exchange, employment, industry, and commerce throughout the whole civilised, world The. second fact is that that debt is not and never was morally due. ; "REPAID IN BLOOD." The debt was not a.commercial debt and was more than, tenfold repaid on the field of battle in. gallant British blood, Mr."Shaw said. The futility of expecting repayment was demonstrable when it was considered that on ordinary balance alone Great Britain was in debit on her dealings with- the United States. The payment of ordinary; trade balances was hard enough in view of the difficulties to payment created 'by the creditor, but when to all that was added the enormous burden of war debt the exchanges became paralysed and the resulting chaos spread, as it had done, to Europe and to the world .generally, including the creditor nation herself. The agreed cancellation of the war debt would be the most helpful step which Great Britain and America could take towards the rehabilitation of the world's trade and commerce. Unless and until that step is taken we can expect no striking change for the better, for the existence of this unpayable war debt is a constant threat to the only. means by which the economic relationship of the nations can fee maintained. ; ; BROTHERHOOD OF EMPIRE. On the question of disarmament Mr. Shaw said that in his humble submission, when fear and distrust were in the saddle and the brotherhood of man seemed very far away, they ought to be all the more thankful for the brotherhood of'the British Empire, the strongest and most solid force for peace and good will that history had ever known. Mr. Shaw said the credit of New Zealand stood high on the London market,- and . there was a great amount of understanding of the Dominion's difficulties and of admiration for the way in which she .was overcoming them. That kindly feeling had more than a sentimental value; it held the promise of future friendly assistance in the development of the Dominion's great potential resources. ' In his opinion, the achievements of the past were but stepping stones to the future that lay, ahead in the next century of time,'-, and 'to that

future he could see no bounds so long as the old pioneering spirit survived and took advantage of the new weapons which modern science and invention had laid to its hand. The second root of. Empire, Mr. Shaw continued, was British shipping. He knew that the people of New Zealand would never suffer that root to be torn up by foreign hands. HERITAGE OP EMPIRE. "My third root of Empire is the greatest of all and goes deeper than the rest," he added. "Without it the British Empire would never have been created. Shoulcl it fail, the- British Empire will vanish away- like smoke. For it was on the steadiness, the courage- and the initiative, the strength and the loyalty of our fathers that our heritage was founded. I am told that you have no aristocracy in New Zealand. With that, statement I profoundly disagree. You.have what has well been called the greatest of all aristocracies, the aristocracy of character. While that aristocracy endures you will not fail, for it is broad—based upon the simple, homely, kindly virtues which made the noble history of the Old Country, and its roots stretch far and draw "their life from the Unseen." ■„■ ■ ■ ■