RECOVERY POLICY

New Zealand Herald, Volume LXXI, Issue 21983, 14 December 1934, Page 13

RECOVERY POLICY

DIRE EFFECTS FEARED REACTIONS IN EUROPE (Received December 13, 5.5 p.m.), NEW YORK, Dec: 12 The former Director of the Budget, Mr. L. W. Douglas, who resigned at the end of August owing to his dissatisfaction with the New Deal policy, in a sensational address to the Economic Club of New York, gave a warning that war in Europe might .result from the American Government's recovery programme, which he sharply attacked. He said that the mounting Budgetary deficits must result in inflation, with further depreciation of the dollar, which would intensify the depression in the gold standard countries and possibly force them to suspend gold payments. " Political disturbances are very apt to ensue and the Parliamentary system, already partially extinct on the Continent, may make its complete demise. " But this is not all. Depreciation of exchange is a devastating weapon in economic warfare. It always has and always will intensify nationalistic feelings. Superimpose this intensification of national prejudice upon the international political prejudices already existing on the Continent of Europe, and the possibilities of another destructive war make one shudder." »