Economic Problems of To-day

Manawatu Times, Volume LV, Issue 6839, 21 April 1932, Page 3

Economic Problems of To-day

DISTRESS SINCE THE WAR THE WORLD SLUMP AS SEEN BY CARTOONISTS Adopting the novel method of illustrating a lecture with cartoons by the world’s noted artists, Mr. J. A, Brailsford spoke on “The Distress Since the War” at Feilding on Tuesday evening, under the auspices of tho W.E.A. The cartoons used were largely those of David Low, the New Zealander, who is now in tho front rank in Britain and is probably the best caricaturist of our time. These showed how bitterly the hopes of “a land fit for heroes’’ had been disappointed after the war. Those who had been led to expect rich rewards were faced with the horror of unemployment. Tho hope of “making Germany pay” had proved “a great illusion,” and one striking cartoon showed Britain and France as mountaineers, tied to a Germany which had slipped over a precipice and was sure to drag them to ruin unless they could pull her back to safely. The effects of tariffs, trade restriction and war debts were also strikingly illustrated. An American cartoon showed how popular opinion had expected salvation to como from low prices—and yet falling prices were a major cause of tho business ruin, unemployment and distress. The final cartoons showed vividly the human tragedy of those who asked “not charity, but a job” —the right to give some worthy service—and who were apparently unwanted in the world. Reparations and War Debts

.Mr. Brailsford said that iu tho movement'to cancel reparations and war debts lay the secret of one of tho fundamental causes of society’s present ills. People were coming to realise that Germany and her war-time allies could only pay the largo sums demanded by spoiling tho markets of other exporting countries throughout the world. The more the Germans lowered their standard of living in the attempt to pay, tho more severe would their competition be with British and other industry. The same principle applied to war debts. While the debtor countries were being ruined by their burdens (greatly increased by the general fall in the value of the goods with which they paid their debts), the creditor countries wero suffering equally from unemployment, because their markets wero spoiled. Liberals in tho United States had long favoured the general cancellation of war debts, but Americans in general, and particularly the financiers, had asked why the American taxpayer should have to shoulder the burden of the cost of Europe’s war. Now, however, so prominent a politician as Mr, A 1 Smith, candidate for the Democratic nomination for the Prciidency, was advocating cancellation in 3. form that, would favour the recovery of America’s export trade. The Italian Government had voted definitely for general cancellation, and the movement in this direction was strong everywhere. Debts Not a New Problem

What, was not realised was that, the troubles now arising from war debts had already been growing gradually long before the war. The wealthy countries had invested larger and larger amounts in loans to undeveloped lands, including lands of poverty and low wages, such ns Asia and Africa. The initial effect was to promote British trade, since the loans were made very largely in the form of British goods, but when repayment of interest and principal had to bo made, it could only bo by exports from these countries competing in the world markets and undercutting the British producers, tho competitors having the advantage of cheap labour. At the same time British investors, assured of incomes from abroad, tended to become careless of the fate of British industry and its employees. Unemployment. had been growing in Britain long before the war, and writers such as J. A. Hobson had warned the country of the growth of a parasitism similar to that which had brought the downfall of Rome. This was a real and most formidable danger to the western W orld —that wo should become content to have our people degraded and demoralised by idleness, w T hilc we became more and more dependent on the cheap labour of other lands. Also, the time was likely to conic when the accumulation of debt would prove an insupportable burden to the debtor lands and the whole system would crash. Lending at interest, if continued beyond the point of providing increasing returns, was obviously ruinous to lender and debtor. This we were learning in regard to the war debts, but the wider implications had not been noted. The. position had been made vastly worse by the fall of general prices sinco tho war.

A Pressing Need As the fall of general prices had been the chief immediate cause of the present unprecedented ruin, so the most pressing need was to check this fall, said Mr. Brailsford. The committees of experts set up in Britain and New Zealand had recommended some restoration of tho price level, but both naturally opposed

any unrestricted inflation. Lord MacMillan's committee in England had gone farther than the New Zealand economists by proposing an effort towards stabilisation, or steadying, of the general price level by international action. It appeared unlikely that tho nations would unite to bring about this necessary reform within a reasonable time, and some economists and bankers favoured independent action on the part of each country. Mr. Reginald McKenna, chairman of the Midland Bank and former Chancellor of the Exchequei in Britain, had spoken strongly in favour of this course at the last annual meeting. He had said that control oi the currency to give a stable price index was absolutely necessary if we were to avoid the repetition of such catastrophes as the present. The dangers of a “managed currency” had been overestimated, and predictions of disaster had been belied by actual experience since Britain had gone off the gold standard.

Mr. Brailsford said that this seemed tho reasonable view. The iuattoi' was urgent for New Zealand. Unless some action were taken in the direction recommended by the economists, the people of this country would probably have to face a continuation of the slump, increasing in severity over two or three years.

After discussing various proposed remedies, including tariffs, which ho described as absurdities, Mr. Brnilsford went on to observe that the forces of co-operation were gradually asserting themselves. The growth of private monopoly powers was forcing the people to conserve their own interests through greater municipal and State activities; at. the samo time, the comparative inefficiency of State machinery was inducing enlightened private employers and workers —though far too many —to experiment with plans of co-operation, profit-sharing, co-partnership and employee partnership. Wc would not get far without a spiritual basis—a recognition of the value of honesty, moral honesty ns well ns merely legal honesty, a scorn of all parasitism, a growth of the spirit of service. How far we were from such ideals was indicated by the prevalence of gambling. However, finer impulses would assert themselves more clearly when better organisation of society gave them a better chance.

I-lope, for the Future We could look forward to the future with hope, Mr. Brailsford observed. Mankind was like ail adolescent discovering the possession of vast new powers, but struggling painfully to control those powers and attain their proper social use. It seemed a mad world. J.t was mad with the madness of glorious youth. Perhaps it was even suffering the pangs of a new birth of life. In meantime we must face the immediate distress. Nothing was to be gained from hatred and contempt. Unemployment was, in the speaker’s view, as terrible a tragedy as starvation itself. Most people had real sympathy with the sufferers; there had been hardly a murmur against the proposed heavy tax of 1/ in the £1 for the benefit of the unemployed. However, if mere relief wore relied upon and the fundamental issues were not tackled, those in authority would be driven more and more into the folly of positively discouraging effort, and would very probably bring about a deplorable lowering of the standard of living in this and other countries. Would we get down to the real issues before it was too late’? Or would wo who had led the world’s material progress use our new powers so insanely for mutual destruction as to hand over the leadership to others who would be sensible and wed powe.r with wisdom, making life more abundant for mankind at large?