LIKES OF INQUIRY

Evening Star, Issue 22892, 25 February 1938, Page 11

LIKES OF INQUIRY

VAN ZEELAND'S WORK TALKS WITH GOVERNMENTS More than eight months have now elapsed since M. Van. Zeeland began his economic inquiry on the invitation of the British and French Governments, said 1 The Times ’ on January 10. During that time either M. Van Zeeland himself or his colleague, M. Maurice Frere, have visited Washington .and most of the capitals of Europe, including London, Berlin, Warsaw, The Hague, Paris, Vienna, Budapest, Belgrade, Bucharest,. and Rome. Great care has been taken to keep the principal Governments informed, of all the results achieved at each stage of the inquiry. M. Van Zeeland’s long talk with Mr Chamberlain, fresh from his consultations with members of the Italian Government, will enable him to make a number of important additions to his report; these will be submitted to the French Government, and when their views have been obtained, his report can be completed. The procedure may seem cumbersome, but it has one great advantage; it makes it possible for him to keep out of the report any recommendations which would be rejected out of baud by any Government. In this sense, however, M. Van Zeeland will bo presenting an “ agreed report ” and not just an “ arbitrator’s award ” which might well give the signal for an outburst of fresh, and public, discussion among the Governments concerned. POLITICS AND ECONOMICS. While any attempt to forecast the conclusions of the report is to be deprecated, it is nevertheless permissible to indicate some of the general principles on which the inquiry has been conducted (the report has now been published) . In the first place, it is impossible completely to separate economic from political questions. Economic appeasement may depend upon a political detente, or vice versa, but it is now evident that neither a purely economic nor a purely political approach to present-day problems can solve them.

It must not be forgotten that most of the trade barriers which to-day hold up the flow of world trade, and the economic experiments which have done so much to undermine confidence, were first imposed as emergency measures against the consequences of the 1931 depression. The origins of the present German Devisenbewirtschaftung, French quotas, Italian clearing arrangements, and President (Roosevelt’s New Deal go back to that year; the Governments which introduced them were not then thinking of. planning or self-sufficiency, but simply of protecting their peoples against the rising tide of crisis. Since then many of the restrictions have been given a political rationalisation. To that extent they have become political in character. It follows from this that the world

cannot he divided into two economic camps, into the States which believe in self-sufficiency, and into those which do not. After all, there is no such thing as complete self-sufficiency, except among primitive communities. Germany still does a large volume of foreign trade, and she makes ample use of such international facilities as insurance and cable and wireless communication in order to market her goods. Similarly there is no country which practises complete 1< reetrade, and even Great Britain and the Netherlands, tho last strongholds of the Freetrader, have been forced to introduce restrictions. These measures differ in degree, bub not in kind, fro lll those enforced hy the totalitarian States. INTERDEPENDENCE. Nevertheless, it is true that currency regulations tend, in the long run, to divide the world into two economic camps. Exchange control can he successful only in so far as there are a number of countries where currencies are free, and so long as there are some countries which allow others to develop a favourable balance of payments at their expense.- The stability of some of the leading Continental currencies is assured only so long as Great Britain, France, and the United States allow others to deal freely in their currencies. . , It is felt that it might he useful if this interdependence, which unites the world in spite of all attempts to divide it, were emphasised once again. lhat can best be done through the Bank tor International Settlements, an institution where the world’s central bankers, irrespective of political differences, meet regularly to discuss _ common problems. It would be quite in accord with the terms of the Tripartite Currency Agreement of September, 1900, if the bank’s authority were strengthened and if it were aWowed to play a more active part in the management of the various, exchange equalisation funds. „ , No doubt some of M. Van Zeeland s conclusions will have to be discussed at an economic conference. It is safe to assume, however, that no conference will be called until the ground has been carefully prepared. Its task, once it has been agreed to hold it, will be to ratify an agreement reached as a result of conversations through the usual diplomatic channels, and to talk at large upon the state of the world.