BIG PROBLEMS

New Zealand Times, Volume XLVI, Issue 10536, 12 March 1920, Page 5

BIG PROBLEMS

RESTORING EUROPE SUPREME COUNCIL’S IMPORTANT! PRONOUNCEMENT. NORMAL" ECONOMIC RELATIONS DESIRED. REDUCTION OF ARMIES. By Telegraph—Press Assn.—Copyright. .custraiuui and N./.. Cable AssociationLONDON, March &• The declaration on the economic conditions of the world approved by i the Supreme Council states that the Council, after carefully surveying all : the aspects of this vitally urgent pro* ( blcm, is agreed upon the following recommendations with a view* to tha amelioration of the present economics difficulties in Europe. Firstly, it is of paramount import-

ance that peace conditions should ha ’ completely restored at the earliest pos- : sible moment throughout the world. In order to achieve this object it ia desirable: (a) That peace and normal ; economic relations should be re-estab-lished as soon as possible throughout ; Eastern Europe; (b) that armie* ; should everywhere be reduced to a ; peace footing; that armaments should bo limited to the lowest possible 'fig-! ; uro compatible with national security. and the League of Nations should be invited to consider as soon as pos- ; sible proposals to bring this about; (o) States created or enlarged as a result ; of the war should immediately re-es-tablish full and friendly co-operation* and should arrange for an unrestricted] interchange of commodities in order! that the essential unity of European* j economic life should not be by the . erection of artificial economic barriers. - /

Secondly, not only the Government of each country ■ but oil producers \ should immediately attend to_ the ese- 1 . ; cution of all measures contributing td a full resumption of peaceful industry,-: [ the encouragement of a better output by the workers, improvement of machtf ( tnery and means of transportation,’ ! and the removal of disturbing features such as profiteering. : Thirdly, each Government should ; immediately consider a means of urg-i ing upon all, las a. national and vital necessity, the suppressing of extrav-* agance, in order to bridge the gap which must exist for some years between the demand for and the supply of essential commodities. ; CREDIT AND CURRENCY NECESSITY OF DEFLATION EMPHASISED. LONDON, March 8. ‘ The Economic manifesto says it is essential to take early steps to secure ] the deflation of credit and currepcy, ' (a) by a reduction of recurrent Government expenditure to within the limits k of revenue, (b) hy the imposition of tho. additional taxation necessary thereto for ithat purpose; (c) by funding short term obligations by loans subscribed i out of the savings of the people; (d> by the immediate limitation and gradual -curtailment of note circulation.

The provision of raw. materials being essential to the restoration of industry, means should, .be found by which countries at present, unable to purchase tn the world markets can obtain commercial credits. It "would be possible to achieve this- when, the countries have made the reforms previously indicated. The Conference recognises the necessity for continued,, co-operation by the Allies and the removal of obstacles to an easy interchange of essential commo-. dities. The Allies will continue to con-, suit together in regard to the provi-' sion and distribution .of necessary raw materials and foodstuffs, with a view to the early restoration of normal conditions. ’ ,

- The Conference has given'careful attention to the case of the devastated regions, especially in \Northern Erance., The restoration of these regions is of’ primary of economic equilibrium ini: ’ -lishment of economic equqilibrium hr, . Europe and the resumption of normal, trade conditions. Evidently the largrf 'sums'required for this work cannot be ■provided out of current revenue, non can the work ’ of restoration be post-’ poned until reparation from, Germany itf received. Therefore the Conference has recognised that the capital sums required for this restoration may properly be raised by market loans in anticipation of the reparation payments provided in 1 the Peace Treaty, and the restrictions which they desire to see placed upon \ new borrowing do not apply to loans on credit to nfeet this normal capital ex- : penditure.

The Conference has agreed .that if is desirable, in the interest both of > Germany and of her creditors, that the total amount of reparation payable by her should be fixed soon, _ and has agreed to an extension of the period of four months from the signature of ’o Treaty in which Germanv is entitled to make proposals on this matter. ho question of allowing Germany to raise a foreign loan will be referred to the Reparation Corntpissipn.