ECONOMIC PLAN

New Zealand Herald, Volume LXXV, Issue 22949, 29 January 1938, Page 13

ECONOMIC PLAN

EUROPEAN STATES APPEASEMENT SOUGHT DR. VAN ZEELAND'S VIEWS ISSUE OF REPORT By Telegraph—Press Association —Copyright LONDON, Jan. 27 After touring the countries of Central and Western, Europe and interviewing leading statesmen in each country in an attempt to find a plan for economic appeasement. Dr. Van Zeeland, formerly Prime Minister of Belgium, has issued his report. Dr. van Zeeland recommends Britain America, France, Germany and Italy immediately to consider whether agreement can bo reached on general principles which could be embodied in a pact of economic collaboration, subject to the adoption of which there could be more detailed negotiations to give these principles practical application.

After a comprehensive survey of the international economic mallaise, Dr. van Zeeland says the heart of the problem—if the nations wish to diminish the obstacles to international trade and restore it to a degree of flexibility allowing of its development—is the necessity for inducing many countries to mitigate or abandon measures of protective self-sufficiency and return to a more complete system based on an international division of labour.

Replacement of Raw Materials It is impossible, says the report, to divide the nations into distinct economic groups, some practising complete autarchy and others strict international free trade. It must be recognised thateconomic relations are on a very different basis compared with before the Great War. Formerly international exchanges were effected across the frontiers between individuals, private firms and private interests. To-day international economic relations are taking on more and more the character of exchanges between economic units constituted h.v States themselves.

Referring to the efforts of some countries to replace raw materials with synthetic products because of their inability to pay for raw materials after the shutting out of their manufactured goods by other countries, Dr. van Zeeland adds: "The protectionist policy of countries which produce raw materials is reacting against themselves. Moreover, it damages those they count as their traditional customers, for vicious circles are thus established." Five-Power Conference Proposal The report visualises a pact of economic collaboration embracing the largest possible number of States, or in any case open to all. Its object would be to assist the participants to raise the standard of living of their nationals. The pact would contain two parts. The first would be negative, whereby the participants would agree to abstain from practices contrary to the general interest. The second would be positive, whereby the participants would' bind themselves to examine in a spirit of mutual assistance problems arising from their economic relations.

Separate and more detailed arrangements could be concluded under tho aegis of a general pact. Tho first step would bo a conference between at least France, Germany, Britain, the United States and ltalv to discuss tho question whether to accept tho report as a basis for .a discussion of economic collaboration. If tho answers were constructive, the next stage would be the appointment of a bureau which would invite all States to explain their international commerce difficulties and what asistance they expected from other States. Vital Question of Colonies

The report suggests that mandates should bo made international. Dr. van Zeeland says he considers that it would, perhaps, be opportune to adopt, in respect to colonies, the system at present obtaining in the Congo basin. Where this system could not bo adopted, the possibility might be examined of creating privileged companies, whose capital would be divided internationally, to offer real guarantees of impartiality.

Dr. van Zeeland does not minimise the difficulties. He points out that some States do not see any solution of their economic problems except by the redistribution of colonies. Others attribute tho difficulties to exaggerated protectionism, and others blame the unequal distribution of capital a t nd the lack of adequate understanding of the money markets.

Many circles blame, above all, intensive rearmament.