WORLD'S DIFFICULTIES.

New Zealand Herald, Volume LXIX, Issue 21113, 22 February 1932, Page 11

WORLD'S DIFFICULTIES.

NATIONS NOT CO-OPERATING.

AMERICA AND ITS GOLD.

WAR DEBTS AND HIGH TARIFFS. RUSSIA'S ECONOMIC EXPERIMENT. "The most obvious fact suggested by world travel to-day is tho interdependence of nations," said Professor A. G. B. Fisher, professor of economics at Otago University, on his return by the Aorangi yesterday from an extended tour, during which ho visited China, Russia, European countries and the United State 3. "Everywhere ono gains tho impression of people struggling rather futilely to control world forces by narrow local efforts, and it is not surprising that tho results are seldom satisfactory," ho said. The causes of present economic difficulties wero numerous, Mr. Fisher said, but among the most important was the foolish nationalist sentiment, which nearly everywhere tried to persuade people that the purchase of foreign goods was something to be ashamed of. When that feeling was common it, was not surprising that trade fell off and production declined. Economic difficulties were also complicated "by political troubles, although it vvss an exaggeration to blame war debts and reparations for everything, Mr. Fisher said. There was a strong isolationist sentiment in the United States, which was most unwilling to make further debt concessions. It was difficult not to sympathise with Americans, who asked why Europe should complain about tho burden of debt, and at the same time continue enormous expenditure on armaments.

Gold Deep in the Earth. While it might bo reasonable for America to insist on debt payment, it was not reasonable at the same time to make payment through the ordinary channels so difficult, as a result of , tariff restrictions, that the credit organisation of the whole world was seriously disturbed. Americans were coming to see more clearly the inconsistency of debt payments and high tariffs, with the curious result that one powerful influence in the direction of a liberal debt policy might be the reluctance of .manufactured* to give up the tariff. The connection between falling prices, which were in part a symptom of the appreciation of gold, and tariff and debt policies, which together encouraged the accumulation of gold in New York and Paris, was not generally understood in the United States. It was not truo that gold was being deliberately and maliciously hoarded in New York, but, given the general attitude of the world, including tho United States, toward reparations, debts and tariffs, it was difficult to avoid tho unusual gold movements which had been causing so much trouble. "I saw the gold reserves of tho Federal Reserve Bank buried five storeys deep in the bowels of the earth, and the careful precautions taken to guard it strengthened one's suspicions that gold is not an entirely rational foundation for world currencies," said Mr. Fisher. "American public opinion is apparently strongly in favour of gold, although it is difficult to attach any very precise meaning to the-gold standard if most of tho lest of tho world abandons it. Many of tho more important English authorities still avow themselves formal adherents of the gold standard, but they add tha* they do not think a return to gold would be desirable for some time, perhaps for several years Sceptics about gold naturally reply that, if a paper currency can be successfully managed for several years during a period of unusual difficulty, there is no obvious reason why the experiment should not be continued indefinitely." Russia's Five Year Plan. "Tho most stimulating and disturbing part of tho world to visit just now is Russia," ho said. "Those who are looking for tho normal tourist attractions of London and Paris will bo disappointed with Moscow, but anyone interested in tho human side of a people will get more thrills in Moscow in a week than he would receive elsewhere in a year. The casual tourist is as freo to about and seo things for himself as ho would bo in any other European capital." Tho average standard of life in Russia was still far below that of tho average tourist, but, for tho most part, little attempt was made to conceal the gaps which were still obvious in Russian productive equipment. Whether tho Five Year Plan would succeed in the sense that in every department production would be brought up to the schedule figures at tho end of the period was a question of less importance than that tho plan was a living idea, which had been so ardently adopted by many of the Russian peoplo that they felt convinced they were working for something inevitable. While in the rest of the world there was little real confidence in rapid economic improvement and much talk of decadence and retrogression, in Russia peoplo definitely felt they were on the up-grade and that events wero being guided to a happy issue. Starting from a very low standard, Russia had naturally an easier task than other nations in making improvements, Mr. Fisher said. Tho Russians realised they had a long way to go before they reached a satisfactory standard.