THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, JULY 11, 1933 PORTENTS AND POSSIBILITIES

New Zealand Herald, Volume LXX, Issue 21540, 11 July 1933, Page 8

THE New Zealand Herald AND DAILY SOUTHERN CROSS TUESDAY, JULY 11, 1933 PORTENTS AND POSSIBILITIES

Into tho uncertainty of . international affairs tho action of Franco in suddenly increasing tariffs comes with an alien definitoness. It creates a surprise akin to that felt by tho Chamber of Deputies on its being asked to act in such a matter without tho customary notice. For ono thing, it cuts across tho idea of a tariff truce during the period of the Economic Conference. For another, since half of the increases affect British imports, it may be condemned as a studied throwing of sand into the cogs of Anglo-French reciprocity. Howover, it is probably not so sinister a move as it seems. The words of M. Daladier plainly disavow both opposition to efforts to promote international trade and hostility to Britain; France, he says, does not seek either a closed door or self-sufficiency in the economic sphere, and looks upon relations with Britain as constant and cordial. There need be, therefore, no swift blame of Franco for flinging another apple of discord among the parleying nations. Nevertheless, such action at this time calls for explanation. Foremost in this must bo put the French Premier's assertion that the aim is merely to "consolidate" disadvantageous tariffs, a way of saying that the intention is solely to remove anomalous details that operate against French interests. In turn, of course, these changes in some fiscal items may bo made a basis for a better reciprocal adjustment between the tariffs of the two countries. Then there is the frank desire to rationalise the French Empire markets, a desire that British folk can appreciate. Yet there remains the question as to why this move is made just now. In view of the London discussions, the reasons put forward fail to justify it as timely. French opinion, linking it with the attitude of America, comes nearer to realities. It is doubtless a conscious reaction to that attitude. America refuses to cooperate in a general attempt to stabilise currency, preferring to limit her efforts to her own monetary need, and at the same time urges the conference to get on with other things—"price levels, credit policy, individual external indebtedness, prohibitions, restrictions and countless other practice's that are breeding war." Very well, says France, aware that monetary problems interlock with all else and fearing that America's attitude may be a portent of cheap goods sent to flood the European market, we will at once Jook to weaknesses in our tariff wall. So far from being untimely, then, the move may give America an opportune hint. Since M. Daladier got his bill through tho Chamber, a little but significant word has been spoken in Washington—by President Roosevelt's secretary and with knowledge that it would be made widely public. It takes the form of a prediction, in which a.wish can be read. The conference, this trusted official prophesies, will adjourn shortly, not hopelessly baffled in its currency purpose, but simply to per-, mit the study, by special commit- ; tees, of the many problems involved. This is more than interesting. Either he was saying nothing or he was conceding that the conference would use means to get back to real business. There was an easier and more natural way of saying nothing —by saying nothing—so it is likely that he was inspired to qualify the statement by the head of the American delegation that only a® residue of questions, although substantial, remained for discussion after his country's refusal to assist in any scheme for worldwide stabilisation of currency. This may be attributing too much importance to the Washington hint or even placing a wrong construction on it. Unfortunately, several times since Mr. Roosevelt's welcome announcement of his determination to be helpful it has been necessary to ask "Stands Washington where it did 1 ?" But its withdrawal from co-operation in currency measures has been so downright that any indication from it of a recognition that many problems are involved is to bo welcomed. For it is precisely on this aspect of the discussions that the American cleavage has taken place—on the degree of possibility of treating the problems in thought-tight compartments. The assumption that they can be so treated flies in the face of established facts. Opinions may widely differ as to whether currency is the villain of tho piece, but that the whole action on the stage depends greatly on monetary policy is almost too obvious to be worth saying.

It may be possible to reach some practical agreement on the residual matters named by the chief American delegate without his country's participation—a thing he apparently did not contemplate when he recited his list—but nothing of vital moment can be done, by any section or sections of the great group represented in London, without reference to currency. Whatever the accepted basis be is immaterial —for the purpose of this outlook, however vital for the full co-operation of the countries in the sectional groups that may be compelled, should America bo obdurately aloof on this question, to take their several courses apart from her. Whether gold countries, or sterling countries, or countries within the orbit of the British Empire, they may agree to take some useful step toward stabilisation. But it is clear that the narrower the group the less serviceable any such step will be. This is the burden of the reasonable complaint against America's attitude. Granting that her concentration on her own currency interests may achieve something • the concession has limits in view of the incurably international nature of commerce nowadays—the achievement would bo of little worth. An opportunity to do something comprehensive, and therefore of greater worth, still exists. Maybe the French reaction will point Washington back to the broad highway.