AS THE WORLD WAGS.

Oamaru Mail, Volume XLIV, Issue 14026, 7 April 1920, Page 2

AS THE WORLD WAGS.

(By Mercurius.') If New.Zealand leads the. world, as a' producing country; .she , also leads the world in her unswerving -effort to get deeper, into debt. .] t is admitted l that the productivity -of New Zealand is phenomenal, and. it would need to be, as the following figure* will show.: ■ In Christehurch a committee was formed in connection with the proposed national exhibition,- and it re-ported on the necessity of making increased efforts. to extend the scope of the Dominion's manufactures and exports. It laid particular emphasis on the. difference between the load of debt New i Zealand carried compared with th:\t of any other country, great and small, and i these figures cannot be disputed. Our I abilitv to carry . the load is not disI puted. because we are'. jjerhaps more | productive than any other country, and lif our debt-per bead -is large \ our ■■ ex-.. i ports per head are also large, larger I than .that of any other country ; butthe fact must not be overlooked that at the period the figures referred to (1917-1918) >• the prices were, considerably inflated, and in 1920 are still more inflated. In 1917-1918 the debt, per head of New Zealand was £'l32 Os Bdo while'that of Australia was £57 0s Bd. The difference here is so great_ that it is-as well the figures .should sink into the' understandings the people; so that bv whatever means that can be adopted the people should be made to realise that it is only by hard, work and little play that we can make [ourselves secure against the rainy day.that will most-assuredly come. One need not be charged with pessimism when he draws people's' attention to what will happen when we have to get out of our aeroplane and hang on to the tail of- a paper kite. It is true that- the exports of New Zealand were per head in 1917-1978 'nearly double,, those of Australia, but then" our debt per head is much more than double that of Australia. In 1917 the debt of the United Kingdom was £Bi 9s 2d per head, of the United States £8 9s 4d, France £94 3s 4d, Italy £29 lis,' Russia £l3 10s lOd, and Germany £sl ss.' The debts of the United States and the European countries have increased considerably since 1917, but so has that of New Zealand. and the relative position may not be disturbed to any great -'extent. • . It _ has ahvavs been imagined that the Old : Country ' was smothered with a huge load of debt, but while her debt may be hard to stagger under, Jt is no harder to bear than the load the people of New Zealand have to sustain,. Tf oiir exports are . large our imports are also comparatively large. In 1917-.1918 the imports of New Zealand were £l9 0s 8d per head, w - nile those of Australia, stood at £l2 6s nd. The exports of New Zealand for t.He year under notice stood at about- £3O per head, while those of Australia, were. £l~y 4s 2d, thus while our exports were licarlv double our. imports were only a third' more. But why should there i;e that, third? We are discounting the future in importing non-essentials .because at the present time we are' sellour goods at high prices. Mr Lloyd George stands on safe ground when he tolls the people of ."Britain they will have - to work and work hard if they wish to keep their heads above water, and they respond by threatening to strike ail round 1 for shorter hours and increases in wages. Higher, wa-ge-s would matter nothing- if all countries were alike, but shorter hours might a famine in everv country. * * * •*

A few years ago- political economists had to fight their hardest to dispel the delusion "that a. country could be- made wealthy by an increase of paper currency..' Tbev had to argue from the basis of solid reason, but solid reason was unrjrmvincing to the disrfples of ihe paper money cult. They argued that gold was merely a counter, and within itself no inherent, value that should place it on a higher pedestal than a piece of paper that the State had endorsed, a piece of paper, in short, that the nation stood behind. The dream of the printing press and a. bale of paper has been dissipated by the condition o-f the world at the present moment, for. if gold :,is only, a 'counter. the paper money that was to supplant gold cannot even he designated by that name. Its value has almost disappeared in Russia, Germany, and other European countries, and has so largely decreased in the more wealthy countries that it- has given a fictitious value io- everv article sought to be purchased with it. Gold and not paper is the backbone of our commerce, and the country that, has most of the former and least, of the latter is best able to- do business on a satisfactory foundation. Ihe great war, which made- it necessary t& bring the printing press and the bale c-f paper into active requisition,, lasted so long that the printing press a.nd the bale of paper were used beyond thepoint of safety. We all know the result. The- world is flooded with paper, which has depreciated to such an extent that in Germany the paper mark, which was valu£ for lid before the war, is only value for lAd. now in some countries.' Prussian paper money has 110 value outside that country, and very little inside, for the issue o!* paper money-has been limited apparently only by the supply of paper.. The soaring prices of every essential commodity has bean largely influenced by the bales of paper that "have been thrown broadcast over some of the warring nations. In Germany, for instance, paper money w.as about the only currency, and from a. ]}d upwards there was little else to do business with. Germany had so much paper currency and so. little metallic money that no nation outside her own domains wants to have anything to do with it. Gold still .holds its own, and Ac Yankee, who holds the most of it, has taken the place of the Jewish money changer—he is making a . Tat thing out of the contingency that kept him out of the war till he had, filled his pockets with it, and now lie is only prepared to "change" it for paper "at a huge discount on the paper. Those who know, Sir Joseph Ward amongst the; number, have pointed out the danger of an excessive use of paper money, for we have or had these paperhangers' in New Zealand in large numbers; but it will take them a. generation to surmount.the rout of their pet theory by the invincible facts attaching to the currency for carrying on the war.

If wo .compare the paper currency of 1913 with the latest returns weft nd, talcing 100 as the'standard, that Britain has increased hers to 244. Italy 440, France 36-5, and the United States to 173. What Germany and Russia have increased their paper currency hy is not- known, hut whatever II figure it may he we nfay give 'expression to the confident, belief that they will not care to make it public. The nations were forced into the step .by the inexorable exigencies of the war, knowing full Well at- the time that the day of reckoning wouhl come. The ' United States aarl Eritaiii can navigate their troubled financial waters. ' because they Jnu'e so great an aggro- » gation of wealth behind ; ■ them, but ? what about Italy and France? It will only be by sonic- heroic measures, and 1 the only heroic measures that can be 1 taken will not be those that will engender patriotism in the bulk of their people. They will rather encourage the disaster of Bolshevism. These figures afford an insight into the pro--polling forces that dominate the Frenqh claims for the immediate payment of the German indemnities- and reparation, as it' Germany, who is stricken to the earth, can offer anything material for the relief of France or any other nation. 'Arid where are France and Italy to look for the assistance, that is to put them on their legs. Since the armistice was signed the United States has advanced to tile • Allies about- £850,000,000, and previous ' to that 'a- considerably larger sum. Now, the United States plainly tells the Continent of Europe that it has no. longer "the desire to plav the . -wart - .of. a to a lazy horse.'" The fact is that United States financiers believe that the countries of Europe are not taking the necessary steps to puii their houses 'in . order, . which moans in plain terms that that, can only be done by more and harder work. The—reference "to ' a "nose-bag for a lazy, horse" is thus explained. The more the. United States lends- to Europe the less -effort will thq people of France, Italy; BelCtum,; _ and other countries, make- to withdriaw and burn the paper money that is disorganising their trade with other In tlin meantime-, the : financial structure - of Europe iis built of paper money, and that sort of thing I is too flimsy to stand the adverse breezes that : are blowing, arid that i | will,, blow more adversely before long, i' ' " /

Tli-e shadow of ■ Bolslioivsin overhangs*' Europe, and the nations are afraid -to take drastic, steps because dread I the result. ' The advice of the.' late •Secretary to the United States Treasury may be sound in its purpose, but lie fails to offer acceptable* advice! ::s Ito how it is. to be applied. There, is. -no known remedy for preventing a volcanic: outburst in the earth's crust,; and the attempt to. compel the nations to work out their salvation by the sweat of their brows -might. produce the outburst that all dread. Germany ■is wrestling with the Bolshevism' that has. been created by shortage of food | and her tangled ■ economic condition, i and she can only be rescued from i chaos by more food and more raw material. but where is-she to-get. either if producing countries will not iaocept her paper money, or, accepting it at its present - value, 1 insist- on its face value paid? . Germany would go bankrupt.