WORLD CRISIS

Otago Daily Times, Issue 21580, 27 February 1932, Page 15

WORLD CRISIS

OFFICIAL BRITISH NOTE • 5

WAR DEBTS RELEASE OF GOLD HOARDS. ■*. . . 4 (From Our Own Correspondent.) - ; LONDON, January 21. ' A strong and significant hint of British policy concerning reparations and war debts is conveyed in the observations of the British Government on the report submitted by thq, economic experts to the Commission of Inquiry for European Union last August. The British Note, which was issued by the League of Nations Secretariat, states that apart from the underlying, cause of the present crisis, it is the conviction of his Majesty’s Government that a satis l factory settlement of the question of intergovernmental debts is an essential condition for the revival of confidence which would restore the normal movement of capital, and the achievement of such a settlement is the most important contribution which can be made by the governments concerned at the present time towards a restoration of, normal prosperity throughout the world. ' ■ THE FUNDAMENTAL CAUSE. ■'k The British Government are in entire agreement with the experts’ view that “ a movement of capital from countries having credit balances to markets showing a deficit is an essential preliminary condition of European reconstruction.”! The drastic reduction in the volume of foreign lending is, in common with other symptoms of the crisis, due to profound disturbance of the economic life of the worM caused by the unprecedented fall in the price level, which has made it; difficult or impossible for debtors tp honour their obligations. 3 This fundamental cause of the crisil can, in the opinion of the British Goy; ernment, “ be remedied only by appropri* ate action on the part of those coun| tries which have accumulated abnormal supplies of gold.” ‘,s With regard to international trade policy, the Government notes that, according to the experts, “the ultimate goal must be the widest possible collaboration of the nations of Europe ift the sense of making Europe • a single market for the products of v any and every country of it.” This statement is taken to envisage Customs unions and all possible forms of rapprochement as means of attaining the ultimate object. The British. Government hereupon observes that com] plete Customs union must necessarily constitute an exception from the most-favoured-nation clause, and in many of the British commercial treaties .with foreign countries provision for. this exception has already been made. CUSTOMS UNIONS. | In so far as other rapprochements noi amounting to complete Customs union] such as, for example, regional tariff pr'e> ferences, are contemplated, “ his Majesty’s Government remain of the view . . . that it would cause conflicts with the whole spirit of the most-favoured-nation clause if it were open to any countries to conclude arrangements with each other which they did not extend to other countries. “ Such minor exceptions to this principle as have been recognised in the past ... do not constitute a justly fication for any group of countries icy set up such arrangements in future.” The Government entertains consider* able doubt whether the safeguards sug?gested can be regarded as overcoming the; objections. J ’ The German Government, in theief Note, also published to-day, complain that various European countries have taken “ measures which constitute a*: hindrance to trade and which are the exact opposite of those recommended, by; the economic experts’ report.” Unless «L stop is put to this process the present), crisis will, the Note declares, become much worse.