NOTES AND COMMENTS.

New Zealand Herald, Volume LXVIII, Issue 20968, 3 September 1931, Page 8

NOTES AND COMMENTS.

INDIA'S DEBT TO BRITAIN.

•"'The history of the British connection with India is remarkable and instructive. Having gone to India originally for trading purposes, we slipped gradually into government, and no one who reads history fairly would deny that the British have been the means of bringing immense benefits to the people of what, when we went there, was an oppressed and distracted continent," said Lord Irwin, in a speech at Harrogate. -"We have established order where chaos ruled; we have brought justice within the reach of the humblest of India's citizens, and wo have given to India a new conception of political unity. No praise, therefore, is too high for some of the best men of our race who have given their lives to this service and created the India that we now know; and I think that if it was ever seriously suggested to strike an historical cash balance between the two countries, Great Britain's account would on such heads as these be found to stand in overwhelming credit." But in doing all this they had, perhaps half-unconsciously, brought India to think along the lines of their own political thought, and had scarcely stopped to ask what was the certain end of all the contacts which they had striven so earnestly to establish. It was the natural consequence of that long process that led Britain in 1917 to proclaim the purpose of the British people as being that of leading India to self-government.

GERMANY'S UNDOING.

" Not only Germany but Hungary and other parts of Central Europe also are involved in the loss of confidence which has caused the withdrawal of short-term foreign credits from those countries, the flight of domestic capital, and the closing of the banks," the City editor of the wrote last month. "The crisis has proved to be much too serious for things to go on exactly as before. In "the two years 1928 and 1929 foreign purchases of German securities amounted to little over £30,000,000, but in 1930 foreigners on balance reduced their investments in Germany by about £8,000,000. In 1928 and 1929 Germany is calculated to have borrowed on short-term credits altogether about £133,000,000 (net), but the net inflow in. 1930 dropped to a negligible figure. This excessive dependence upon short-term credits has been Germany's undoing, for since September last she is estimated to have lost about two-thirds of her foreign short-term credits. According to the bulletin of tho Royal Institute of International Affairs, about 60 per cent, of the total recent withdrawals has been taken out by Americans and about 30 per cent, by Germans themselves through purchases of foreign currencies." Tho writer adds that if the present crisis puts an end to the extensive use of shortterm foreign credit for financing internal trade or indirectly for financing reparations, it will not bo unproductive of good. Short-term credits are sornotimes necessary in an ' emergency, but as a permanent type of finance they are very undesirable.

SCIENCE AND PRODUCTION

Discoveries might appear to tho chemist to be final in their achievement, but they were only tho beginning of a new problem to tho industrialist, said Sir Harry McGowan, in his presidential address to tho annual meeting of tho Society of Chemical Industry. It wa3 tho task of tho industrialist to hold the balance between the application of discoveries and the preservation of tho existing economic equilibrium. New knowledge might threaten to derange whole industries, raising social, financial and political problems. In tho case of artificial silk, for example, the existing textile industries found a new supply in their midst, insisting by the merit of its attractions upon a share of public demand. Cotton and wool had to take noto of a new arrival. From the application of chemical knowledge to agriculture came the furtiliser industry, and now, where once man feared scarcity, he stood stifled with plenty. Tho balance between industrial and agricultural production had been dislocated. The scientist might congratulate himself upon having made two canes of sugar grow where only ono grew before, but tho industrialist might sco his financial structure tumbling 'about his ears. Every improvement in processes which increased mastery over Nature, tended to lead to increased supply. The vast number of workers in industry were slow to realise that their products wore bringing in less money, and, therefore, slow to grasp that unless all costs fell proportionately with prices, business would bo lost and employment reduced. I Other difficulties arose from the custom j of borrowing capital at fixed rates of in- ] terest. Out ol smaller profits fixed interest rates took the same amount of money. Dividends were reduced, market values of shares declined, and tho inves-, tor's purse was closed to new enterprise.