WORLD CAUSES

Hawke's Bay Tribune, Volume XXI, Issue 14, 30 December 1930, Page 4

WORLD CAUSES

The number of those is legion who have explanations to offer for the almost universal trade depression that afflicts the world. Probably it is due to a combination of circumstances that differ widely in different countries, yet produce a cumulative effect that is common to all. Among those who have sought to divine causes is Mr. T. W. Lamont, of the hanking house of J. P. Morgan and Company. In the course of discussing the Young Plan in its application to Germany, he pointed out that the successful working of any plan of international financing must depend to a certain degree upon the state of world economy. This he admitted had been seriouslv affected by the fact that the severe industrial and commercial depression naturally has to be reckoned with in that, as indeed ip all other plans, for the future. Then, summarised by “Bradstreet,’’ Mr. Lamont attributed the existing depression to ■the following chief causes:— 1. To production outrunning consumption not, only in many basic commodities such as cotton, wheat, copper, rubber, silk, sugar, oil, but also, in many manufactured products. 2. In part to the effort made in inany Parts, of the world to hold up commodity prices artificially, whether in rubber, cotton, wheat, coffee, copper. or what not. Thus, when prices for such comumfl'ties finally gave way the severity of the business collapse was accentuated. 3. To the fafl in the price of silver and thus in the purchasing power of perhaps one-quarter of the world’s population gs represented by India and china. 4. To a shifting, on an almost unprecedented scale, of golrl holdings among various countries. Thus from ’he beginning of 1929 to date the B.gnk of Frapce and the Fed®! 8 ' Reserve banks of America have increased the\r gold reserves in the ■'o-n'reeate amount of nnnrpxinm’olv 1.120.000,000 dollars (224 million sterling), a large part of this being drawn from the central bank reserves of other countries. 5. To current political unrest in manv quarters of the vlohe. including notably India, China, and South Americq. 6. In certain countries ot the : ".lph,e. especially America, to a spirit of ramnaut snnetflaipon, with the inevitable results that everybody I’no.ws. ’ l ’"kipg actual statistics, Afr. Ltpnopt showed bow greatly ip excess of the average of the five preceding rears was the world’s production of cotton, "iigar. rubber, copper, crude petroleum and pig iron. In conclusion, after enumerating thirteen acute depressions that the United Stetes bad experienced since the beginning of the Iflth century, he had to admit study had as vet failed to show how to prevent their recurrence.