POWERS CONFER

Manawatu Standard, Volume LI, Issue 197, 22 July 1931, Page 7

POWERS CONFER

FINANCES OF GERMANY. GENERAL ASPECTS DISCUSSED. RESTORING OF CONFIDENCE. (United Press Association—By Electric Telegraph.—Copyright.) Received July 22, 10.30 a.m. RUGBY, July 21. This morning’s sitting of the Seven Power Conference lasted over two and a half hours and consisted of a discussion of the general aspects of the situation. There was agreement that the most urgent part of the problem was to devise methods of international and financial co-operation which qould be promptly applied to restore confidence in Germany’s economic stability. It was agreed that the first step must be to ensure that no further credits be withdrawn from Germany. Mr H. L. Stimson, on this point, emphasised his firm belief that the American banks would continue to co-oper-ate in maintaining their credits with Germany, and hoped that the banks of other countries would adopt a similar sane and helpful attitude. An earlier British Official Wireless riiessage stated: In opening the proceedings at the Seven Power Conference, Mr Ramsay MacDonald expressed the view that for good or ill the present moment might jmove one of the turning points in the world’s history, for if no solution were found of the present crisis, the political and financial dangers which might follow could not be foretold. If a solution were found, then it would be a striking proof of the growing effectiveness of international co-operation. Mr MacDonald recalled how in the past two years the unprecedented fall in prices among practically all the primary commodities had thrown out of gear the economic life of the world. This had accentuated the burden of debts, and led to difficulties for all debtor countries.

The effects most acute felt internationally,- industrially, and financially by the States and the special position of Germany, both as an exporting and debtor State, had involved her to a supreme degree in sill the problems which the other States* had to face in a less critical manner. The German Government had increased taxation, but last month it felt bound to state that unless the situation improved it would have to use its- right under the Young Plan to declare a postponement of its liabilities. This alarmed the foreign lenders, on whom Germany had largely depended during the past six years, and withdrawals of short-term credits ensued on a large scale. When the situation appeared almost hopeless came the dramatic announcement of i President Hoover’s offer, which history would pronounce as an act of rare courage, and statesmanship. It had been estimated that Germany had lost from £150,000,000 to £200,000,000 —equivalent to over two years’ reparation payments. The trickle of exchange purchases grew into a torrent, until the inevitable breakdown occurred.

■' ‘ Tims they would have now not mprely to consider measures for putting into effect President Hoover’s proposals, but also the emergency which had since developed in Germany, otherwise the flood could not be stemmed before it overwhelmed the whole of Central Europe, with consequences, social and political, as well as purely financial, impossible to estimate. Their task briefly stated was to re-, store the confidence ’of foreign investors in Germany. Clearly the problemhad both a political and a financial side, though the conference was to be concentrated on the latter. They met in a spirit of co-operative goodwill, determined to reach an agreement not only meeting the requirements of the present crisis, but also to make' an effort to pacify Europe’s disturbed mind. They must candidly admit there were some things which their respective public opinions would not permit them to do. They were not at the conference to enforce or defeat or humiliate, but to consider ,th© problems objectively, to remember that they were in essentials interdependent, and to find accommodation upon something to which the various Parliaments would agree. As regarded the financial aspect of tlie crisis, the question of what could bo done must largely be reserved for bankers and financiers. He could only speak in general terms. There seemed two main alternatives. One was to find means of providing netv loans or credits to Germany.* That was _ the matter which had been under consideration in. Paris. He was told that there were difficulties which would have to bo surmounted before any loan could be obtained in the market here. They ‘ must consider this. It might he a solution. It might not be, hut a solution mutually possible and effective for its purpose must be found. The other way would be to attack directly the question whether by strengthening the internal position of Germany they could give an assurance of its stability to the outside world, so as not only to prevent the capital that was already in Germany from being withdrawn, but also to enable it to be augmented. There was no doubt about Germany’s inherent strength, provided she had the required capital resources. It was for that purpose President Hoover had proposed the suspension for the year of all debts and reparations. This represented a very real relief. It might prove insufficient, but that could be examined later. Their first problem was to decide how to put it into effect with greatest speed. They must again work from the point which had been reached in Paris. They were all glad of the conferences held there between France and Germany, and these should prove of infinite assistance. Immense public interest is being taken in the conference, the importance of which is fully realised. This was ■shown by the crowds 1 at the station, and later outside the House of Commons, where delegates were greeted by the Prime Minister, the Foreign Secretary, Mr Arthur Henderson, and the Chancellor of the Exchequer, Mr Philip Snowden.

german Taxation. BERLIN, July 21. The British United Press says that Germany lias decreed that five per cent, be added to all arrears of taxation each fortnight from August 1.