NOTES AND COMMENTS.

New Zealand Herald, Volume LX, Issue 18294, 10 January 1923, Page 6

NOTES AND COMMENTS.

THE : STATE OF GERMANY.

: " When the present moratorium expires on January 15, 1923 A we shjill get no money; and the best thing this country can do is to make up its mind to face this brutal fact and direct its policy accordingly," declared Lord Beaverbrook in an article in the Daily Express. "Let us -chalk up our score against ■; Germany on the slate, and then wait with patience until that country hasi been through the Court of International Bankruptcy arid become once more a paying proportion, when the bill ■ can be presented ; with some prospect of its being paid in part. . Let us tell France quite frankly that for the present we expect no more money from Germany. If she thinks she can get more money, she is welcome to try. But Great Britain will , waste no. more time looking for the end of the financial rainbow. Germany is bankrupt. There is no point until the final result has been achieved, at which* any one could hold up his hand and declare the bankruptcy complete, final, and irremediable. An inability to' collect or a refusal to impose taxes to balance expenditure; the use of the printing-press to make good the deficiency; the consequent depreciation of the value of the mark, the destruction of the' saving habits of the people, by which alone industry can '•'■ secure the capital for carrying on its enterprises and paying wages—all have contributed to this final result. Germany is. bankrupt. Germany cannot pay until she has made herself solvent. r She can only attain solvency by going through a process of national liquidation. That process Germany is bound. to undergo" in any eventreparations or no reparations —and this none the less because her natural wealth and resources ■ remain untouched by the policy of inflation, which has ruined her finance. Resources may be ' there without wealth being realisable in the form of payments abroad, and this is what has happened to Germany.".

DOMINIONS AND WAR. The constitutional , status of the Dominions is still being actively discussed in Canada. Returning to the subject recently, the Montreal Gazette discussed the test question of the effect of a declaration of war and declared that when Britain is at war it is not for Canada, but for the enemy, to determine whether Canada is at war. "It was, not a resolution of the Dominion Parliament that put Canada into the war in 1914. .The fact that Canada was a portion of the British Empire > sufficed. Whether we will or not, Canada is at war when the Empire is at war. When a conflagration starts in a warehouse the fire disregards interests of the individual owners and contents." ' The Gazette admits that in the last analysis the decision will hinge upon the spirit of th 3 people. "Neither the Premier, nor the Cabinet, nor Parliament can fetter the will of the people fired with the desire to preserve the integrity of the Empire when that integrity; is menaced. Were it otherwise the nations comprieing the Empire would be linked together with a rope of sand. . .<. . .. While the British Commonwealth of Nations exists, all the members are at war when one is at war, and there cannot be dissent from the view that, when such & contingency arises, Parliament should he Bneedily - summoned to determine the extent of Canada's participation therein. That is about as -far as the Dominions can go. The British ■ Constitution is not a written document. It partakes of the spirit much more than the letter of the law, and thereby acquires elasticity, and it is extremely doubtful, even were it practicable, whether the Empire can be strengthened by a formal definition of theduties of each .member in a- crisis that may eventuate in war. For the spirit. quickenetb, while the letter oft maketh dead." " ~«.-..r

PENSIONS AND • THRIFT. ' ; A substantial objection to. the present system of old-age pensions is that it discourages 'thrift, /since the amount of the pension is reduced in proportion to income from ; other sources. A similar principle is in force in Britain, so that a man who has 10s a week from his own savings is debarred from the old-age pension. Dis- : cussing the matter recently, Sir H. # J. ; Mackinder urged that a new incentive should be given to thrift. ;. " T propose that savings invested in National Savings Certificates or deposited in the Tost Office and Trustee Savings Banks should not be reckoned against the award of a full old-age pension,*' he wrotfe. "The limitation of the amount, of such hold-1 ings by the regulations in_force, and,, in the case of the Savings Banks,.by the low rate of interest, would confine .the advantage to the thrifty poor. The State might, perhaps, take over the capital for safe keeping during old age,, adding the interest weekly t® the pension, and, at death, handing over the principal to a nominated person or persons. To many, it seems hopeless to try to save an adequate provision for old age, and useless to save what will merely be deducted from the State pension* But very many > would.; save with zest for increased comfort in their declining years and a small. inheritance for their children. )^^&^ : tificates to the face value of £600,000,000 have: been sold by the •. National .Savings Committee, but a; part of these lias been taken in considerable' sums;by the' comparatively well-to-do. A vast extension iof this method of holding the National Debt, is, I believe, practicable, with ■ the i result that, in this dommantly,, industrial country, we might build up ;the same sound foundation for ■:true, democracy which an agricultural country, such .as France, finds in a peasant proprietary .of the land. ■No doubt there would demands for the inclusion of other forms of;■ small investment within the privilege, but for obvious reasons, I suggest that, in the first instance,, only the-two which I have named should be permitted..; ,

A LESSON FROM HISTORY. A lesson oh the effect of a levy on capital may bo learned from what happened in the latter part of the French / Revolution/ a correspondent writes ■ in : the London Times:— 1795, the Directory decreed ; a forced ■■ loan, which amounted practically to a levy on' capital, because :' the interest . was payable in assignatß, which were worth next to nothing. As a recommendation of the measure, it was given out that it was directed against the rich. "No one," says M. Louis Madelin. " remembered Buzot's saying that in killing the rich you kill the poor as well. A few weeks, M. Madelin tells us, proved the truth of * this saying. Workshops were closed; merchandise accumulated artisans,* finding no demand for their labour, wished the socalled democratic loan 'at the devil. Rural proprietors, hitherto devoted to the Revolution, lost their temper. In: the end, the forced loan produced only 20,000,000 livres, ; out. of the 600,000,000 livres that had been expected, while almost universal ruin had ; been the results ; Undis-i mayed by this failure, the Direct- j ory decreed; another forced loan in the j following year. "■ "Yet again,'' says M. Madolin, 'it was not "the rich who really i suffered, bub, as always, the poor." ■ The' newspapers reported "the ; sudden stag- ', nation of all business transactions; luxury j was cist down in all directions, servants j I were dismissed, and orders for furniture ; and dress were countermanded: ;.' ■ . . ; the general alarm increased merchants. ' i began asking for their passports to Haarlem, Switzerland, and ,: Spain; some of j them :■.'.. declared , fictitious : bankruptciesV i luxury was suppressed, and work ceased." j "Meanwhile, 'at the .cost; of widespread I ruin, forty millions," I says M. Madelin, "instead of the expected hundred, had been squeezed: into the Treasury." After, three months, it; was found necessary to j repeal the decree, ■).-. and return, to more j constitutional ways of" raising money."- ; >,%■ ■■ ■'■'-:■'';':> r -.r -■:''■■'■:/: :•"?.'■'. '\ : ,:^f'^::/ :^'<:'i M'"'