THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, MAY 2, 1927. ECONOMIC EUROPE.

New Zealand Herald, Volume LXIV, Issue 19625, 2 May 1927, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS MONDAY, MAY 2, 1927. ECONOMIC EUROPE.

After long preparation the Economic Conference planned by tho League of Nations is about to be held. The new development of the moment is that Russia has agreed to be represented. The breach with Switzerland having been healed, the Soviet Government is abandoning its boycott of all conferences held on Swiss soil. A delegation 18 strong will be sent from Russia. There is no conference to which Russian delegates could bring a more sincere desire to see something accomplished than to this economic gathering. The Soviet Government wants, and wants desperately, to re-enter the commercial life of Europe. Progress has been made by separate agreement with a number of European countries, but the flow of trade and, even more important, of credit, has not been sufficient to meet the desires or the needs of Russia. Therefore it may be accepted beforehand that the Soviet delegates will be on the alert to encourage any more promising results in conformity with their desires. There is nothing reprehensible in this attitude. It may be •of use in advancing to the goal the conference has in mind, the economic rehabilitation of all Europe. The only reservation in valuing Russian presence and co-operation arises when it is considered how different the attitude would be at, say, a disarmament conference. The Russian delegation should be there, none the less. If Russia needs Europe, so in an economic sense Europe needs Russia. The loss of this great area, this immense reserve of population, a source of raw material and foodstuffs, a great potential market, has had a share in producing the severe depression from which Europe has Jong suffered. Those who love Russia least admit its importance in the economic life of Europe, which is to come under review at Geneva.

For the difficulties Europe faces many reasons have been given. In general terms it is commonly said that a great war is always followed by a period of depression. Purely explanatory, this theory satisfies nobody. What are wanted are remedies, not explanations. To find the cure it is necessary to understand causes in detail, not to rely upon easy generalisations. War's wastage of life and destruction of material can be blamed for much, but when countries show over-production of goods and severe unemployment, both of which have afflicted Europe, it is difficult to plead loss of man-power or deficiency in material as causing depression. Last year a body of financiers, industrialists and traders issued a manifesto pleading for a removal of present restrictions upon European trade. This document, commonly called the Bankers' Manifesto, was not received with universal approval, because its literal interpretation placed it in opposition to many established tariff policies. Yet the appositeness of its general declaration, when it said "trade is not war, but a process of exchange; in time of peace our neighbours are our customers, and their prosperity is a condition of our own well-being," could hardly be denied Economists have pointed out with force that the present condition of Europe is a direct negation of this principle. New frontiers have brought fresh restrictions on the freedom of exchange. The desire to*create fresh economic units where new States have been established has created obstacles to trade which have been powerfully detrimental to its increase in volume and value. If there is any agency by which this position can be rectified without the disturbance of labour and capital that would follow the universal demolition of tariff walls, it should be the League of Nations. Against the economic nationalism which hjis been blamed for accentuating depression, there can be found tendencies pointing to industrial organisation on a Continental scale, with national frontiers ignored. The French and German steel industries have been working for some time under an agreement by which cutthroat competition in production and markets has been modified, if not. eliminated'. The production of potash has seen a similar movement, and the world's copper is now to a large extent under unified control. British and German business men have held several conferences, at which the removal of dangerous rivalries and the cultivation of a cooperative spirit have been earnestly discussed. The value of this desire to work in harmony has been recognised. So also has the danger that complete combination on a large scale, with the creation of monopolros in vital industries, might bp made the vehicle of wholesale exploitation. All there is of value in these spontaneous movements could be taken and utilised by the League of Nations, which could also act as a vigilance body, to detect and prevent abuses. There are other problems in Europe needing very delicate handling. The degree in which depreciated currencies and neglect of long-standing war debts have damaged credit, thus delaying recovery, cannot be ignored. Here the League can do little, for it cannot interfere with the domestic affairs of any nation. It can, however, investigate and advise, if or when it has dealt with the many j questions offering for more direct; operations. If the forthcoming conference is not productive of results, j it will not be for want of material I on which to work. j