WORLD CONDITIONS

Otago Daily Times, Issue 21988, 24 June 1933, Page 5

WORLD CONDITIONS

WAR DEBTS AND UNEMPLOYMENT THE ECONOMIC CONFERENCE Since a realisation that the problems of r one country are the problems of all has been forced upon the nations, it was appropriate that the general manager of the Bank of New Zealand (Mr E. W. Gibbs) should devote a portion of his speech at the annual meeting of shareholders in Wellington yesterday to a survey of world conditions. “ Possibly at no time in the history of the world,” Mr Gibbs said, “ have more serious problems confronted it than during the past year. Numerous conventions have been held to deal with them, but the best brains of the world have so far evolved litle by way of solution. That the troubles are international is generally admitted, and a promising attempt to grapple with them was made at Lausanne, but results so far have not been encouraging. The Young Plan was scrapped, reparations as such were ended, but full ratification was isuspended till the Powers concerned obtained gome easement by America of their war debts. As receipts from Germany had gone a long way to meet the payments to America, it will be seen that war debts and reparations hre inextricably bomid up together, as both Britain and France so largely depended on the reparations to pay their war debts. The Disarmament Conference .is so far another source of disappointment, little progress having been made. , IMPORTANCE OF DEBT ISSUE “ Until some solution of these important questions is found, touching as they do the heart of the economic condition of the world, conditions cannot improve. They are at the root of much of the world’s unemployment trouble, and largely account for the want _of confidence in all industrial enterprise. So far as war debts are concerned, it is obvious that Europe cannot pay unless America takes her goods, since, if America in her own interests cannot take payment in goods, Europe has no other means of paying—Europe’s gold is already practically divided between America ' and France. solution, therefore, of this problem chiefly rests with America. The unsuccessful attempts of debtor nations to pay war debts against tariff hurdles which make goods impassable throw the onus on the creditor nation to show a way out. America and France, the two chief hoarders of gold, have failed to benefit by their action, and their troubles arc just as great as those of other nation. , “ The outstanding event in Brilfsh finance has been the voluntary conversion of no less Hian two thousand million of the public debt—the biggest financial undertaking in the history of finance. This conversion broke no contracts, as the time had arrived when the Government had the right of repayment. An important conference, with direct bearing on Dominion affairs, was that held at Ottawa, the full benefit of which has yet to be realised. Its object was to knit more closely trade within the Empire. Our delegates . recognised in coming to any agreement with Britain, that we must in our own interests as well as hers, facilitate trade on a reciprocal basis with our best, and now almost our only, customer.

HOPES OF LONDON CONFERENCE “ The civilised world,” proceeded Mr ’ Gibbs, “ disappointed with the meagre results of other conferences and conventions which have been held, is, as a last hope, looking anxiously to the outcome of the World Economic Conference now sitting in London, where matters of vital importance to all the nations arc under discussion. The issues for discussion include the questions of tariffs, quotas, exchange control, and international currency. , “ As regards tariffs, it is obvious that the world canuot continue to carry on international trade with present tariff ■ conditions, under cover of which all nations arc expecting a one-way movement of goods and products, ignoring the fact that exports can only be paid by imports—an axiom well illustrate! by the United States, the most self-contajned country in the world, which is nevertheless suffering from trade stagnation perhaps more than any other, “ The quota is a much-debated question which, it appears to me, should bo dealt with nationally, within reasonable limits, on the basis of the trade between any two countries. For example,' the Soviet Union’s imports into Great Britain amounted in round figures to £32,000,000, while British imports into Russia reached £9,000,000 only. The exports from Britain to France and Germany amounted .to £64,000,000, while Britain imported from tbesc countries £105,000,000. The United States took from Britain £26,000,000 only, while Britain’s bill to her for imports was no less than £104,000,000. New Zealand’s position was much the same, her exports to Britain being some £38,000,000, against her imports of £12,000,000 only. Denmark sent produce to Britain valued at £40,700,000, taking back goods valued at only £9,200,000. n “The exchange control and international currency are also big problems, and the discussions between the nations will he watched with keen interest.”