PROBLEMS OF THE WORLD!

Manawatu Standard, Volume LII, Issue 307, 25 November 1932, Page 6

PROBLEMS OF THE WORLD!

FINANCE MINISTER’S REVIEW.

VALUABLE CONTACTS ABROAD.

WELLINGTON, Nov. 24. The Minister of Finance, Hon. V\ . Downie Stewart, who returned from England to-day, made some interesting observations on the world financial situation. “My visit to England was very brief but full of interest,” he said. “I renewed acquaintance there with a number of the men I had met at Ottawa, and was fortunate in meeting many prominent men in the world of finance and politics —as well as some economists of world-wide fame. “In anticipation of my arrival, Sir Thomas Wilford had kindly arranged a succession of interviews with many important men in the City, and the result was that every day was filled with interest, as most of the discussions related directly, or indirectly to problems affecting the welfare of New Zealand. If I had spent months instead of weeks in London I could not have accepted half the invitations I received to meet individuals or groups of men who are deeply impressed with the overwhelming and urgent necessity of finding some solution to the present depression which is threatening the wliolg fabric of our financial, Industrial and agricultural organisation. “At Ottawa I had the good fortune to have many talks with Sir Henry Strakosch and Sir George Schuster, the Finance Minister for India, and others and these contacts were renewed and extended in London. I also met Mr Montagu Norman, the Governor of the Bank of England, Mr J. M. Keynes, the noted economist, and Sir Basil Blackett. FINANCIAL STORM CENTRE. “Mr Montagu Norman is, I suppose, the storm centre of world financial ’policy at the moment. He was one of the first to call on me on my arrival, and the last to say good-bye —ho is regarded by some as the saviour of Europe and a financial genius of the first order—by others he is considered as the main obstacle to any radical policy aimed at raising world prices. Lord Snowden,. in reviewing a recent biography of Mr Montagu Norman, endorsed the view that he is the greatest statesman in Great Britain since the war, and praises his vision in undertaking the gigantic task of restoring the financial stability of the ruined countries of Europe as an essential preliminary to restoring prosperity in Britain. Lord Snowden apparently holds the view that credit expansion serves no useful purpose in a period of trade depression, and says: ‘lt is not credit that is needed to-day, but markets. When the markets are open credit will be forthcoming.’ Mr Keynes also recently paid a striking tribute to Mr Norman, although he does not always agree with his policy. He declared that Mr Montagu Norman was a great master in the details of his technique and a great public servant disinterested, chivalrous, and devoted to the public interest. “Both at Ottawa and in London I took every opportunity of emphasising the fact that all the debtor nations are engaged in a race against time and that unless effective means are adopted without delay for raising the world level of prices, not only will the debtor countries crash, but the whole system of modern capitalism will do the same. Those who want proof of this should read the speeches of Sir George Schuster and others at Ottawa.

“The present depression has not, previously, been equalled in severity, not only in industrial* disturbances — both primary and secondary—but also in the upset it has caused in the Budgetary. positions and the international relationships of the different countries of the 'world. In fact, a number of Governments have haa to face bankruptcy together with complete economic and political collapse. This aspect of the depression is closely related to the legacy of national and international indebetedness arising from the World War, as well as to the heavy fall in commodity prices, which has so greatly increased the real weight of all debt burdens. So far economic remedies have been applied more from a national than an international standpoint, and world trade and commerce as a whole has suffered.

“It is fortunately, however, becoming more manifest that international co-operation must be successfully achieved if we are to maintain the world as a highly organised and interdependent society, and find a way out of the crisis. MUST BE DEBT RELIEF. “It is generally agreed that the first real step toward the world’s revival must clearly be the relieving of Governments from obligations which they are unable to fulfil. This means the cancellation on a considerable scale or the reduction of inter-govern-mental debts in order to re-establish the solvency of national economic systems, and so provide a fresh founaation on which general prosperity can be built. The time appears to be at hand when, if this does not come by way of international agreement, it will come in the form of default. “I had no time to visit Geneva, but great importance is attached to the disarmament question, on which international discussion has been centred for some time. Unfortunately progress toward disarmament is so slow as to be almost negligible. But if a real solution of this problem could be arrived at there is hope for a speedy clearance of the reparations and debts questions. Some progress has already been achieved at Lausanne in respect to reparations, and hopes are entertained that at the World Economio and Financial Conference, to be held early next year, progress on international lines will be made in the removal of many obstacles which are prolonging the world crisis. CENTRAL BANK CO-OPERATION. “On the subject of banking my inquiries have indicated that since the war tendency throughout the "'J™ has been to place greater responsibility and more freedom in the hands of the central banks. In fact, central banking is now looked on as the natural sequence in the march of progress of the trading banks. The post-war period has also witnessed considerable advance in central bank cooperation, especially since the establishment of the Bank of International Settlements. Such co-operation is regarded by world authorities to be of extreme importance in instituting and maintaining international cbntrol of credit and prices. ~ Quite frankly, Ido not know when the depression will end, nor did anyone I met really know. But lam sure one good result will emerge when dayhght breaks, and that is that we will have learned enough to prevent a ” K c “ n n Ce - of th ® .present paradoxical absurdity of a crisis not of poverty but of plenty. Many of the best and most expert brains in the world are concentrated on ascertaining how to acquire such a control over credit and # production trLf 1St t rib as wIU re-establish a st ? ndard of Hvin* which should our d r,! y lmi>rove L a j ld ke «P pace with sourJl ” lng control over natural re-