THE DEBTS PROBLEM

Otago Daily Times, Issue 21975, 9 June 1933, Page 9

THE DEBTS PROBLEM

SETTLEMENT IMPERATIVE.

The report of the International Chamber of Commerce to be submitted to the Would Monetary and Economic Conference contains recommendations which it is considered are essential before any comprehensive trade revival can be expected, The main proposals ase:— That Governments concerned in the settlement of the problem of, intergovernmental political debts must proceed without delay to remove this ground of controversy. That the restoration of a satisfactory international monetary standard is of primary importance. S.uch a standard should provide for:— (q) The stability of foreign exchange rates; (b) a reasonable measure of stability in prices, in so far as prices are effected by monetary factors. The World Conference should inaugurate the movement for a general restoration of a free gold standard by establishing* conditions which would enable such a standard to work satisfactorily. That the present instability of many exchange rates should be dealt with by the Governments concerned at the earliest possible moment. Above all, it is necessary to put an end to the competitive depreciation of currencies. That all Governments should agree to establish order in their national finances, balancing their budgets, above all by reducing expenditure and rigidly avoiding inflation. Otherwise many of the other measures of reconstruction will be hindered or counteracted. That each Government shoul ’ help to promote a rise in the price of primary commodities by creating conditions favourable to the revival of international trade through the removal of restrictions. That the problem of international indebtedness should be mitigated;—(a) By creditor countries pursuing an economic policy which permits the receipt of debt payments in goods and services; (b) by debtor countries making every effort to avoid default; (c) by creditors and debtors meeting in a spirit of goodwill to settle each case on its merits wherereadjustment is desirable or unavoidable; (d) by the establishment for this purpose of responsible national or international representative bodies of bondholders and other types of creditors; (e) by utilising existing agencies capable of accelerating the conclusion of agreements between debtors and creditors and by setting up special machinery for this purpose if such agencies should prove to be inadequate; (f) by the creation of facilities for the regular collection of accurate and comprehensive statistics concerning capital movements and debt obligations between nations. That no effort should be spared in obtaining the diminution or abolition of existing trade barriers and present restrictions to the movement of men, goods, capital and services. That in the meantime Governments should agree not to make them a permanent element in their national policy, thus avoiding the introduction of new measures of restriction. That Governments should agree on the urgent necessity of reducing tariffs from their present excessive levels and on the

methods by which this reduction can be carried out. An cud must be put to further tariff increases, and without prejudice to the advantages of bilateral agreements, many consider that, where nations can see their way to reducing their tariffs amongst themselves, they should be encouraged within the limits of the safeguards specified by the League of Nations. That when under present conditions the further expansion of production in primary commodities becomes a barrier to the recovery of prices and the revival of trade it should be checked.