INDEPENDENT COURSE

Northern Advocate, 20 December 1932, Page 5

INDEPENDENT COURSE

PRESIDENT DETERMINED COMMISSION ON DEBTS, OVERTURES TO MR. ROOSEVELT. (Uhlled Press Association —By Electric Telegraph.—Copyright.) (Received 10..‘50 a.m.) WASHINGTON, December 19. Lacking Congressional approval for the revival of the war debt commission, the President declared that it was necessary for him. to proceed independently of Congress to set up machinery for further debt discussions with those nations who had not defaulted. He suggested the interlocking of the war debt, economic and disarmament questions, and indicated that a commission on debts would be appointed by him, some of the members of which would also be delegates to the World Economic Conference, to be held next year, while others would have liason with the present disarmament negotiations.

It is the assumption here that President Hoover already has made some overtures towards Mr. Roosevelt and that the personnel of the group which is to handle the debt discussions will be submitted to the President-elect for approval before their appointment. Inquiries at White House and the Department of State brought the response that there was no information to be given out as to an agreement between Britain and the United States for joint examination of the war debts.

The only mention of this subject in the message to the Congress, however, was as follows: —

Preliminary Needs.

“Discussions in respect to both the debt questions and the world economic conference cannot be concluded during my administration. Yet the economic situation in the world necessitates preliminary work essential to its success. The undertaking of these questions should not be delayed until March 4, and I propose, therefore, to seek the co-operation of the President-elect, Mr. Roosevelt, in the organisation of the machinery for the advancement of the consideration of these problems. “A year ago I requested that Congress should authorise the creation of a debt commission to deal with the situations which were bound to arise. Congress did not consider this wise. In the situation as it has developed it appears necessary for the executive to proceed. Obviously any conclusion will bo subject to approval by Congress.’ ’ Adequate Compensation.

The President reiterated his views against cancellation or reduction without adequate compensations. He said it would “meet my hearty approval” if Congress should decide to re-establish the debt commission. Congressional opposition to any such step is so strong, however, that the Chief Executive voiced no hope that the previous" recommendation of his ever would be fulfilled.

The President only negatively excluded from the proposed discussions nations which had defaulted.

In the opening part of the message Mr. Hoover said: “It is certain that the most urgent economic effort still before the world is the restoration of price levels. The undue and continued fall of prices and trade obviously have many origins. One dangerous consequence, however, is visible enough in the increased difficulties which are arising between many debtors and creditors.

‘‘The values behind a multitude of securities arc lessened. The income of debtors is insufficient to meet their obligations. Creditors are unable to undertake new commitments for fear of the safety of their present undertakings. Economic Forces. “It is not enough to say that the fall in prices is due to decreased consumption, and thus the sole remedy is an adjustment by reduced production. That is in part true, but decreased consumption is brought about by certain economic forces, which, if overcome, would result in a great measure of recovery of consumption and thus recovery from depression. Any competent study of the causes of the continued abnormal levels of prices would at once establish the fact that the general price movement is world-wide in character and international influences, therefore, have a part in them.,”

“'Further exploration in this field brings us at once to the fact that price levels have been seriously affected by the abandonment of the gold standard by many countries, and the consequent instability and depreciation of foreign currencies. These fluctuations in themselves and through the uncertainties they create, stifle trade, cause invasions of unnatural marketing territory, result in arbitrary trade restrictions ail'd ultimate diminished consumption of goods followed by a further fall in prices.

‘ * Tlie origins of currency instability and depression reach bach again 1o economic weakness rooted in the World War, which have culminated in many countries in anxieties in regard to their financial institutions, the flight of capital and denudation of gold reserves, with consequent jeopard}' to currencies. Vicious Cycles. “These events have been followed bv restrictions on the movement of

gold and exchange, and in frantic efforts to protect their currencies and credit structures. These steps have again reduced consumption and dimim. ished prices, and are but parts of the. vicious cycles which must be brokenat some point if, we are to assure economic recovery. - •

“We have abundant proof of the ■ effect of these forces within our own borders. Depreciation of foreign etit- ' rencies lowers the cost of production - : abroad compared with our costs, thusundermining the effects of our protective tariffs. The prices of agricultural and other commodities in the United States are being seriously affected, thousands of our workers are being thrown out of employment through.- - the invasion of such goods.

“I concur in the conclusions of, many thoughtful persons that one of - 1 the first and most fundamental pointsof attack is to re-establish stability of currencies and foreign exchange, and ' thereby release an indefinite number. : of barriers against the movement ofcommodities throughout the world. I am well aware that many of the fac- . tors which bear upon the problem, are. purely domestic in many, countries, but the time has come when concerted acv - :1 tion between the nations should botaken in an endeavour to meet these primary questions. .. .V. Monetary Issues. “The gold standard is still the only practicable basis of international settlements and monetary stability so far i'asj.the more advanced industrial nations are concerned. , ;j “The larger nse of silver as a. sup-- ' plementary currency would tend --to. stability in many quarters of the; world. In any event it is a certainty- ■■ that trade and prices must be disor-. ganised until some method of monetary and exchange stability is attained. It is for the purpose of discussing - these and other matters that we- have joined in the World Economic Conference where means and measures for ... the turning of the tide of business and price levels through the remedy of some of these destructive forces can be fully and effectively considered,' -. and, if possible, undertaken annuitant-" ously between nations. ! “A reduction of armaments also has bearing upon these questions. The . stupendous increase in military expenditure since before the Great,-War is a large factor in the unbalanced na- : tional Budgets throughout the world.” V-. A message from Albany states t-hatt Mr Roosevelt declined to comment on Mr Hoover’s message. Republicans and Democrats alike endorsed the general tenor of Mr Hoov- ;

er’s message,