The New Zealand Herald AUCKLAND, FRIDAY, NOVEMBER 10, 1944 WHITHER AMERICA

New Zealand Herald, Volume 81, Issue 25047, 10 November 1944, Page 4

The New Zealand Herald AUCKLAND, FRIDAY, NOVEMBER 10, 1944 WHITHER AMERICA

I The British Empire at this stage of : the war is most interested in the •• influence of the elections on Atneris can foreign policy This involves a n consideration of the domestic, par:l ticularly the tariff, policy of the 6 Democrats, but for the most part ! the British people will weigh the statement that the triumph of Mr ) Roosevelt is the death knell of isolationism. They already know the international attitude of Mr Roosevelt and the great story of his gianting of all aid "short of war to Great Britain which led inevit- • ably to America's entry into the con- ] ilict. But our people—and indeed ■ the peoples of Europe—have never forgotten the repudiation by Congress of President V\ ilson. The election this week will live in history ' as the most significant since the return of Lincoln if it means that Coni c;ress is ready to support the entij of ' the United States into an effective ' system of world security. The rejection of such dangerous isolationists as Senator Nye, Mr Hamilton Fish and Mr Maas goes some way to proving that the American public is behind Mr Roosevelt in the policy outlined at Dumbarton Oaks. The proof is strengthened by the President's success in a Middle West .State like Illinois. It seems clear that Mr Roosevelt will retain and probably increase his majority in the Senate whose support of the President's foreign policy is essential. The nation as a whole has endorsed Mr Roosevelt's proposals that the United States should, as a member of an international security council, accept its decisions and carry them into effect. Tt remains to be seen whether Congress will have the courage to read this endorsement into the result of the elections. Certain notes of caution must be struck. The nation's approval this week of the President's policies is much weaker than in 1040, a tendency not wholly explained by an understandable aversion to a fourth term. The Middle West was gen e rally loyal to Mr Dewey. If his declarations on foreign policy appeared much the same as those of the President, many will recall tha"? the Republicans under Harding paid lip service to international co-opera-tion while proceeding to coldshoulder the League of Nations. The Middle West probably believed that Mr Dewey's emphasis on American sovereignty was an earnest that he would not go as far as Mr Roosevelt, however much the President himself laid stress on sovereignty, that blessed word. The Republicans can still rely on the Senate's jealous custody of its treaty-making power. The Senatorial returns'are not yet complete enough to show whether the Democrats have the necessary two-thirds majority to ensure the entry of the United States into an international organisation. Even if they secure that majority the President will need all his skill to pilot a treaty through the Senate. The complex character of the American parties is too often forgotten or misunderstood in British countries. Thus the Democrats range from the extreme right to the left. The Southern Democrats are most strongly conservative. On the whole they are likely to support Mr Roosevelt's foreign policy, perhaps as a legacy of the years when their interest in cotton gave them a cosmopolitan outlook. The New Deal Senators will certainly support the President. But certain conservative Democrats from the west and the east may need some careful handling before they vote for proposals involving an American obligation to check aggression in Europe or Asia Perhaps the most interesting feature of the elections is the organised support given by Labour to the President. Although disunited. Labour is gradually feeling itsstrength in the United States. The conservative interests in the Demo crat Party are well aware of this and distrust the political activities of the C.T.O. Out 'of this distrust arose the dismissal of Mr Wallace, an ardent New Dealer and internationalist, from the Vice-Presi-dency. His successor, Mr Truman, is a colourless figure. Mr Roosevelt has borne for 12 years an enormous and exhausting burden. If, unhappily, he were to fail to fill his office for the full four years the Vice-President, usually a person of small importance, would suddenly become the nation's chief executive. Mr Roosevelt in the last few months has not spoken much of the New Deal. He knows when to retreat. But Mr Wallace is a radical who has violently denounced American "big business." There is no compromise in him. The Democrats in choosing Mr Truman have shown the strength of the conservatives in their party. Little is known of Mr Truman's views on foreign policy. But they are not as broad as those of Mr Roosevelt. Some day they may become of importance. STATE TRADING BANK Mr Nash's ignominious surrender to the Labour Party conference may prove to have decided the issue of setting up a State trading bank by buying out the private 'shareholders in the Bank of New Zealand. The extraordinary thing is that Mr Nash Should second such a proposal when he has convincingly demonstrated that its adoption can serve no purpose. Apparently he is still of that opinion. If such is indeed the case, the responsibility laid on him as Minister of Finance should have caused Mr Nash to continue to resist. rather than to assist, the scheme. He has stated, what is perfectly true, that the Government already exercises complete control over currency and credit through the State-owned Reserve Bank. The same, he said, applied to overseas exchange and share transactions. He added that the Government determined the sums the trading banks must, keep at the Reserve Bank by way of balances and "the evidence was conclusive that the banks had completely co-operated with the Government in carrying out its policy." In the case of the Bank of New Zealand the Government has the right to appoint four

of the six directors and can therefore exercise direct control over . the bank's policy,and business. To buy out the private shareholders : would, moreover, involve a sum of over £5,000,000, if values were asi sessed at current market quotations, and considerably more at assets value. To accept such a liability would surely hinder rather than help the professed objects of the Labour conference—to assist in the tafeks of rehabilitation, reconstruction and development. If the money is used to pay off private shareholders, it will not be available for the stated post-war purposes. Worse than that, the Government would have to find about £970,000 sterling and £168,000 in Australian currency to buy out overseas shareholders —if they consent to being bought out. Thus overseas balances will be depleted at the very time when they should be thriftily conserved against post-war buying of raw materials,' plant, machinery, etc., essential to the processes of rehabilitation and reconstruction. Considering that, on Mr Nash's own showing, the bank purchase will serve no purpose, and that it will be expensive, to the prejudice of Labour's stated objects, citizens may well consider why this project is being pressed. Partly, no doubt, the idea is to placate some of the so-called monetary "experts" in the Labour Party. Partly, also, it must be regarded as another blow aimed at private ownership. In mining and housing the process of extirpating the private owner is already well advanced. Of course, in purchasing the Bank of New Zealand the Government would be acquiring a sound and rich asset in which it already holds the controlling interest and a large and lucrative share. The question is whether the bank would continue to be so valuable an asset when it became, in effect, a department of State. Many customers — many of its best, customers, indeed—might not relish the change and take their business elsewhere. At present they have complete trust in the discretion of their banker, who must often be their business confidant. Rut Government departments are known to exchange information coming into their possession, a practice that a State bank's customers are unlikely to relish. The possible effect of these considerations on the bank's business will readily be recognised. A property for which the Government had paid full value might at once begin to depreciate. Again, a State bank might find it difficult to refuse accommodation to Labour's political friends. Mr Nash made this point when he said "the resistance afforded by the trading banks to the importunities of borrowers who wanted to commit themselves beyond their resources was a valuable bulwark to any Government." Why spend millions needed for other purposes on removing this valuable bulwark 1