NOTES AND COMMENTS.

New Zealand Herald, Volume LIX, Issue 18222, 16 October 1922, Page 6

NOTES AND COMMENTS.

NEW ZEALAND OUBRENOT.

Three years ago the net circulation of banknotes in New Zealand for the first time exceeded £6,000,0t0, the average for the September quarter of 1919 being £6.113,60_ The quarterly returna of notes in circulation, less holdings by the banks of " legal tender notes of other banks," showed a steady increase in the net circulation until the> maximum of £7,163,683 was reached in the December quarter of 1920. Since then the volume of banknotes in actual circulation has contracted to £5,944,960 for the last quarter, a decline from the "peak" of £1,218,723, or 17 per cent. During the corresponding period of seven quarters from March, 1919, to December, 1920, the net circulation rose from £5,510,339 by £1,653,344 to the maximum, the increase being at the rate of 30 per cent.

THE REAL MOTIVE POWER.

"If people are concerned in their individual capacity with struggles and quarrels, ii in industry they attach more importance to personal questions than to those that are vital to the well-being of the community', they create an atmosphere in which ill-feeling is the dominant factor, they divide themselves into camps, they look at every question from the viewpoint of their own individual preferences. The result is that the industry suffers. With it human relationships suffer." This is a passage from a manifesto prepared by the Industrial League and Council and signed by Mr. Lloyd George a large number of members of Parliament, and leaders of labour and of commerce, who endorse it? work for the improvement of relations between employers and employed. It proceeds :—" We know to-day that goodwill among men is, the one thing that can save civilisation. But this goodwill is not, and cannot be, limited to statesmen and their military advisers. The real, ruler of the world to-day is commerce. It is only the worker who can build up what the soldier has destroyed. There never was a time in the whole histoid of the world when the industrialist had so much to offer or the world at large had so great a need of his services. Europe has received a staggering blow. Millions of its best citizens have been lost. The foundations of its commercial life have been shaken as though by an earthquake. The whole Continent W" full of suspicion and mistrust, Its energv looks in vain for a proper outlet. Men "lack necessities and opportunitie. while thero is a vast demand .for everything that Europe produces. Given goodwill, that demand can be met, distress ran be relieved employment can be widened. If every man would so shape his acts in times when industrial crises threaten that be can feel he is fnlfillin, his responsibility to those who died for their countrv, the quarrels that have made the path of industry so difficult in the past few years would not recur. We can all afford an effort to forget the past and make endeavour to mould the future for the common good. Men in every political party look forward to the time when (here shall be a real settlement in Europe. Not until we achieve unity at home can we hope to achieve unity abroad. Not until all classes of the communitv recognise not onlv their rights but also their obligations shall we achieve unity at home.'* DEVELOPING THE EMPIRE. Many of ub feel that our recent foreign policy has been radically mistaken, in pursuing such phantoms as the "bulginc; corn bins" of devastated Russia, instead of devoting all our resources to the development of the Empire, which would yield a sure return, writes Mr. Richard Jebb, in the British-Außtralasian. If formerly the German market was important to us, that is no reason for now trying to help Germany at the expense, of 'France; but rather for creating new markets more secure than any country in Europe can ever bo expected to afford. Therefore, such measures as the Empire Settlement Act, and the undertaking to continue for ten years the present amount of preference, at least, under the British tariff, are welcome signs. But the effect of such piecemeal measures can only be slight compared with the results to be obtained by a comprehensive policy. In the past the intention of preferential duties has sometimes been defeated by the manipulation of freieht rates, especially by international shipping combines? and foreign manufacturers have gained more than their British rivals from the development of new lands by Britannic enterprise. An adequate policy of Empire development would, therefore, embrace all the Britannic interests concerned—migration, production t finance, shipping, postal and telegraphic communications. It seems to be the bare truth that to-day Britain is living on her credit; a security which consists solely in the "goodwill" of her past achievements, as distinsruished from the tangible assets of undeveloped natural resources such as the Dominions possess. Her cne chance of averting bankruptcy, which implies political collapse as a consequence of'economic failure, is by curtailing ruthlessly her European commitments and throwing all her remaining strength into the development of the Empire. THE MABK EXCHANGE.

Becalling the repeated panics in Germany and the accompanying predictions of economic collapse, the Berlin correspondent of the Economist declares that not only have these forecasts never been Realised, but there is no evidence of economio catastrophe in Germany. The certain symptoms, independent of the mark exchange, of such an economic catastrophe might be (1) an aggravation of the State finances, probably due to national inability to clear the necessary taxation, or (2) an aggravation in the nation's material condition, due to exhaustion of real capital and failure to earn sufficient real incomes. Probably the two would go together; and with the second would go declining production, unemployment, and probably also numerous bankruptcies as an expression of individual increase of consumption over production. Of neither aggravation is there the least sign. With the dollar at "000 marks, the State finances are far better than with the dollar at 50 in 1919; and the condition of the people as regards feeding, clothing, regularity of employment, and individual solvency is beyond comparison better. The mark exchange is therefore an entirely worthless indicator of the nation's eoonomic substance. The correspondent also examines the contention that the continual fall in the mark exchange will prevent Germany importing foodstuffs and raw materials. He quotes statistics of the imports month by month in quantities showing that they have Bteadily increased, and in July this year, with the mark at 525 to the dollar, it was possible to import more than three times as much goods as 14 months earlier with a mark eight times more valuable. A final proof of the confusion prevailing on this point is that the same catastrophe prophets who declare daily that production must cease because the more the mark falls the harder it is to import necessaries, also declare daily that ruin is impending because of the threatening surplus of imports over exports. The two arguments actually follow one another in a recent Ministerial speech. Germany is suffering mainly from a currency crisis, and not from a crisis of economic substance, and tho international mark panif and tbe predictions that Germany will be ruined and will drag down all Europe have, if they have no other basis than the mere mark exchange depreciation, no basis at all. The real substance of a nation incessantly and efficiently at work could not possibly be impaired by a mere revolution in values.