EUROPE'S RESTORATION.

Northern Advocate, 3 January 1922, Page 4

EUROPE'S RESTORATION.

j Very important steps arc being taken by Britain and France with the object I of discussing measures for the ccononv.c and industrial reconstruction of Europe, and although most people must have been making holiday during the fast week trade and business experts from the Allied countries met in Paris last Friday.' The object of this conference, details'of which are still awaited, is to pave the way for the establishment of an internatonial financial cor poration. It is believed that such an organisation could create a spirit of confidence and provide an .important medium for the restoration of traio relations, especially with former enemy countries. According to the London "Times," Mr Lloyd George has suggested a European Economic Conference because he wishes to establish closer relations with Russia, but there is evidently a great deal more than that in the proposal. There is useful seopo for international co-operation in stimulating the productive energies, and thereby increasing the purchasing power, of other European countries which are now in a condition little removed from bankruptcy. At the same time action in this direction need rot of necessity involve the assumption by the British Government of undue financial obligations. The whole w »r:d would benefit by the institution of some scheme of international credits. The restoration of Europe's purchasing power is essential to the renewal of: the world's prosperity, and it is especially important that Great Britian should find means of re-establishing trade with European customers. The renewal of prosperity in New Zealand and other Dominions also, of course, depends very materially upon the resumption of production and exchange in Europe. Until she finds an outlet in Europe or elsewhere for the exports she formerly sold there Britain obviously cannot offer the Dominions as good a market as she did before the war. WlO'e it is manifestly in her own interests and those of other parts of the Empire that Britain should participate In a sound scheme of international credits, ■ the coIt ireslore : ao ; « lilts io Is erethe in- £ it be

piinciples of the International Credits Scheme of the League of Nations (the tor Meuleii Scheme). This aimed ia the fu>t instance "not at helping exporters to get rid of their manufactured goods, but at restoring the productive power of the impoverished countries." The central feature of the ter Meulen. Scheme is that the Governments of countries under the necessity of importing on credit should issue bonds, sjcur eel on revenue-producing assets, the gold value of which should be assessol by an International Commission appointed by the League of Nations. Each Government issuing these bonds would lond them to its own nationals, who would then be able to deposit them as sccuritv for foreign credits. As yet tuo ter Meulen Scheme has got little beyond the paper stage. At a recoct d.pte Austria was the only country which had applied for the right to issue bonds. It is~ suggested in explanation that the countries which might benefit arc not yet prepared to effect the financial reforms which would enable tbem lo issue bonds, and that as it applies to short-term commercial credits, the scheme is unduly cumbersome.' Several authorities have recognised, howevcr : that there are important possibilities in the directionTjf extending credits to the impoverished countries for the purposes o! capital expenditure. The suggestion is that investment credits of reasonably long date would enable these countr:.?s to improve their transport facilities, enlarge their productive capacity, and progressively increase their purchasing power. Commenting recently on the latest extension of the British. Export Credits Scheme, the "Economist'' urged that, apart from the necessity of reviewng the postion in regard to German reparations, the main reqirfoments were "firstly, that productive capacity, transport, and trading facilities should be improved in the other countries of Central an ! Eastern Europe, so that these countries can balance their trade once more without an abnormal restriction on their imports; secondly, that their Governments should balance their Budgets, a.id cease meeting deficets by reckless printing of new currency." Under any scheme of international credits the borrowing countries should be compelled to reorganise and thoroughly control their

liiT-nccs. An international financial corporation might do a great deal to a ssist, the troubled couutrioi of Em-one to strengthen their position. Europe will*not see a financial revolution during the current year, but conferences on economic and industrial matters imy enable steady progress to be made.