Untitled

Hawke's Bay Tribune, Volume X, Issue 19, 6 January 1920, Page 4

One of the “big things’ connected with the settlement of the world’s affairs that still awaits solution is the dismemberment of ttie Turkish Empire and the erection of new or revival of old nations out of its parts. Very little, has been allowed to transpire with regard, to such decisions as may have • been reached by the Allied Peace Conference on these subjects. Mr. Lloyo George in his Guildhall speech, on the eve of Armistice Day, made almost* casual., reference to it, but was quite discreetly vague in his dis closures. .After . dealing witll some of the other problenis that fa'ced the Allied Nations, he went on to say: “Then there is Turkey—always trou

blesome in peace and war—and more troublesome in peace than in I think I can venture to say that there is complete agreement among all the Allies on the fundamental prmciples of a settlement with Turkey. First of all, we are all agreed that the Turkish mis-government in lands populated by Greeks, by Arabs, and by Armenians shall come to an end. We are all agreed that tne gates of the Black Sea must be free to all nations, and that their guardianship can no longer be entrusted to the Power that betrayed its trust and closed those gates in the face of the Allies at the behest of tnu Prussian military power.” Then, with regard to “all other questions” affecting Turkey, he wentTm to say that there ought to be no insuperable difficulty in the distribution of the responsibility among the Allies for guaranteeing this policy, distribution among the nations whose friendliness had borne the test of a great war and whose continued cooperation was essential for the peace and freedom of the world. As a matter of fact there can be no doubt but that the dissolution and rearrangement of the Turkish Empire awaits American decision with regard to the Peace Treaty and the League of Nations. There was some general understanding that ■the United States would undertake the restoration of Armenia, and, either alone or in conjunction with some European Power, would also accept a “mandatory” over Constantinople and the Narrow Seas giving approach to it. The delay in arriving at; a disclosed decision about Turkey reflects, of course, very much on the Egyptian situation now giving so much trouble and thus gives ground for further complaint against America’s attitude towards her international obligations. One of yesterday’s cables, dated from Rome, suggested that the Constantinople mandatory would be entrusted to Italy “in exchange for Fiume.” This however, does hot, on the face of it appear to be a very likely determination of the Allied Council.

Professor J. S. Nicholson, of Edinburgh, one of the foremost authorities on currency problems, in discussing the rise in prices and its causes, says that the policy of financing the war by means of voluntary loans, after a certain point was reached, was made possible only by the abnormal increase of credit. If all this credit had been convertible into gold on demand very great restraints would have been imposed on Government borrowing of the kind actually adopted. When, however, public lokns are largely founded on credit inflation is inevitable. The hundreds of millions borrowed are of no use unless they are broken up into the payments that, are required to induce the different sets of producers and war workers to make their effort. The big loan is first of all broken into cheques. Many people may be paid by cheques, but in the end there is always the need Tor cash in the simplest sense. Cash is necessary for wages and for various retail payments. In Great Britain in war time the principal form of qfish was the currency note, and it still is the principal form. In Austsaia it is the Commonwealth note, and in New Zealand: the bank note made legal tender. The currency notes in Great Britain not only took the place of the sovereign and the half-sovereign u the hands of the people, but they , also took the p'ace of gold in the whole internal credit system of the country. If notes are legal tender and are- universally accepted without demur, the banks can meet all demands so loug as they get the notes, if prices were to rise fourfold or tenfold or any other fold, so long as the banks could get legal tender they could pulverise the war credits into wages and the like. Were it not for the notes the Government loans would remain simply figures in bankers’ books, and the war bonus and other encouragements of patriorism would have died unborn.

Having thus accounted for the distribution of War Loan money in the shape of currency of daily use, Prolessor Nicholson goes on to say that s.ll war time, and even quite recently, .t has been maintained that currency aotes have had no effect on prices, but that on the contrary the prices rose tirst and then the notes were issued in response to the rise in prices. Against this argument he pointed to the fact ..u an inquiry he conducted that, the rise in prices as set out by the index numbers showed a general conformity A’ith the issues of tne notes, with a three months’ lag; that is to say, the rise in prices followed the increase of .he notes by intervals of about three months. Both in the United States and in Canada it was also found by statistical investigation that in these countries the increases in prices had i’ollowed and not preceded the issue of notes. Afterwards, in Great Britain, .o some extent, ths rise was a reflex from the United States. The Americans told the British that they must ,>ay more for food, and British prices rose. The bonuses to workers rose. More notes ware issued and more bonuses followed. There were also other influences at work besides the currency at home and trusts abroad. I’here was control of prices in Great Britain, although, unfortunately, he says, the control was not begun until the prices had got well beyond the customary bounds.