NOTES AND COMMENTS.

New Zealand Herald, Volume LXIX, Issue 21117, 26 February 1932, Page 8

NOTES AND COMMENTS.

ACCOMPLISHED FACTS. The opinion that the European States should first wipe out the debts among themselves and then present "the single front of the European debtors" to the United States, was expressed in an unsigned article, attributed to Signor Mussolini, which appeared recently in the Popolo d* 11 alia (Milan). The author argued that if tho European States should cancel Germany's debts the United States would no longer be bold enough to demand payment of the debts of the European States. The United States would riot insist, above all for moral reasons, because the American people is animated by a lofty idealism, and then also for material reasons, since the general economic situation, arid therefore also that of the United States, would benefit from such a step. "If the world began to revive after the one-year Hoover moratorium one cau imagine how it would regain confidence now if the road were cleared, once and for all, of the greatest obstacle which to-day blocks the way of the peoples." Tho United States therefore would lose Nothing, but would gain in another way what she would formally cancel. "Rut the first step," concludes th 3 article, "must be taken iri Europe. ft. is impossible to pretend that the United States should take the initiative; it is Europe which must place before her the accomplished fact which she will end hy accepting because she will be unable in any way to revoke it: just as the European creditors of Germany accept the 'accomplished fact' of her declaration of insolvency. Can one imagine that the Americans can have recourse to hostile acts in the economic and currency fields ? 2s'o. . . The world has need of the United States and the United States has need, as never before, of Europe and tho world."

HOUSING OF WAGE-EARNERS. Local authorities in Britain Mere recently advised by the Ministry of Health to concentrate, their building programmes on houses of modest size and of such a capital cost that they , can be let at an' inclusive rent of under ten shillings a week. "Itis a disappointing fact that, in spite of incurring a capital liability of over £400.000.000 and imposing an annual charge on the taxpayer (exclusive of rates) of nearly £13,000.000, housing authorities in this country have, broadly speaking, not succeeded in providing houses at rents which the poorer sections of the community can afford to pay," the Times observed. " The explanation is that the cost of building was so high for so long that even the subsidy could not prevent the economic rent from reaching a figure beyond the means of the averago wage-earner. The result has been that the enormous housing effort made by this country —which is estimated to have provided accommodation for 4.500.000 additional persons exclusive of the increase in population—lias taken very many people out of uncomfortable conditions, but very few people out of insanitary conditions. It is a fact that in many areas slum dwellers are actually paying higher rates in order to provide houses for far richer people at lower rents. Such a paradox is intolerable, but the way of escape does not lie in larger subsidies, which the nation cannot afford and which have been proved time and again to result in the charging of higher prices for the same article. The proper policy is to reduce the cost of building .until the economic rent of a decent house is within the capacity of the wage-earner." BRITAIN AND GOLD. Reference to the mischievous misunderstanding abroad of the circumstances in which Britain departed from the gold standard was made by Sir Josiah Stamp, a director of the Bank of England, in an address in Birmingham. lie said certain American publicists had practically said that it was a craven thing for England to have thrown up her hands and gone off the gold standard with the bank rate still at 4h per cent., and that to put it up to distress rates would have prevented a drain of gold and even attracted balances. That view, of American origin, had bocome a kind of parrot cry abroad, and he believed it to be profoundly wrong as a diagnosis of the true position in July and August last. Not only would rapid rises have increased the foreign apprehension and desire to get out quickly, but any balances retained or attracted by such a method Mould have been a source of equal danger at a very early date. Any position maintained bv such measures had to meet a day of reckoning, and the state of other countries three months later did not in any way show that they would have permanently postponed their demands. The passion for liquidity, which made everything too solid to move, was on the world already. It was probably true to say that if (.lie politicians had done two years ago what many economists urged as imperative, and had urged the country to adopt in time those measures which were forced reccntlv in desperation, departure from tho gold standard might at any rate have been delayed for a good time. Whether it could have been permanently avoided, having regard to the terrific fundamental forces at work for world gold deflation, was, however, open to doubt.