WELLINGTON NEWS

Hokitika Guardian, 17 February 1932, Page 7

WELLINGTON NEWS

ENGLAND V. THE REST OF THE WORLD, (Special Correspondent). WELLINGTON, Feb, 15, The depression is following its relentless course, and is now taking toll of the countries with bulging hags of gold. France and the United ’States have been stacking up bars of gold and gold coin, and have- rather vaunted this wealth, but if has not sav«d them from the perils of the slump. Both countries are getting into deep water and both must presently ■‘"’hr drastic action to save themselves. The position in the United States is obviously very serious. Unemployment is very pronounced and has probably not yet reached the peak. Labour leaders have appealed to President Hoover for wide economic and legislative relief for the unemployed including the 'enactment of the Dole Bill, which proposes the appropriation of 375,000,000 dollars (£75.000,000) for relief. Labour incii are insistent on the necessity for prompt aid 'for the- suffering unemployed. This corroborates the opinion expressed by Sir Arthur Duckham, a prominent British industrialist and financier, who, after visiting the United States, expressed the opinion that the country would have to fall back on the dole as a measure of relief for the unemployed.

In the meanwhile, Mr Ogden Mills, who succeeds Mr Andrew Mellon as Seeerry of he’ -Treasury, and prior to that was a high official of the Treasury, told the House Ways and Means Committee, that taxes must be -raised by 1,214,000,000 dollars (£243,000,000) if the Treasuary is to balance the Budget. Early in •January, according to Mr Mills, tho Treasury estimated that 920,000,000 dollars of additional revenue would he needed, hut in the meanwhile domestic -trade had gone from bad to worse, making the larger sum necessary. Mr C. R. 'Crisp, chairman of the committee, estimated the deficit for the- current financial yeas, which -ends on June 30th, ml three billion dollars (£600,000,000), -One must not be surprised at the magnitude of the anticipated Budget deficit, for large scale production is a sort of -economic religion in America. There is no .shortage of gold in the United States, and the credit structures cannot have collapsed. The people have lost confidence, otherwise there would rot be hoarding of American gold coins, Economists have not yet furnished us with reasons, technical or otherwise, for the state of aifairs in the United States.

Perhaps a high exchange rate, as advocated .in New Zealand, would provide the American farmers with more spending power. The United Stales foreign trade will irecoive a, further set-back when Britain’s 10 per cent tariff become!, effective. It is estimated that £100,000,000 of American trade would be affected. France this year will have a deficit of £32,wj0,000, and the deficit next year is expected to reach £6O non 000. Las* year the deficit was £48.000,000. Rich and all as the United .States and Frame are they cannot go on living on deficits and declinig trade. Xow locus turn to Britain. The Biiasli people have stood up to the slump in characteristic British fashion, have submitted to increased tax burdens. and when the taxes were line rushed to pay them. The ,President of the Board of Trade (Mr Waller Hinicinian) in submitting tile resolution for the lJ per cent customs duties, pointed out that Britain' s trade in 1931 was tinnneed to the amount ol i£100,000,000 out of capital, and this helped to throw Britam till' the gold standard. It wrs stated by the Prime Minister that .he National Government would balance the Budget and then devote efforts to balancing 'the country’s foreign trade, and they are carrying out the job very laitbtully. Furthermore, Mr Kuneiman was able to a nomine that British trade was being maintained at a surprisingly high level, while the rest of the world had grown prui'ivssi wl y pooivr. Anil this is I.*** * .Fngland we have been told again and again was “effete,” “played out," ami "down and out." Britain is not on a gold basis. The pound sterling in equal t;„ ,|e,ss than 11s in dollar currency, yet the pound sterling claims confidence and gels it. ..Most of Northern Kuropr, the Argentine, India. Australia and New Zeahmd are linked to sterling and others w: 11 soon f llow. To use a much hackltcved expression the pound sterling will again be “top-dog in woild cuiiemy.