A GREAT EXPERIMENT

Otago Daily Times, Issue 22063, 20 September 1933, Page 8

A GREAT EXPERIMENT

THE ECONOMIC CONFERENCE REASONS FOR FAILURE IRRECONCILABLE MONETARY POLICIES (Per United Press Association.) WELLINGTON, September 19. “It is not very likely that such a gathering of nations will be seen again. The expense and practical difficulty of getting unanimity among nations with such diverse interests precludes this possibility, The conference will remain a great experiment which, in my judgment, will not be repeated.” With these words the Prime Minister (Mr G. W. Forbes) summed up his impressions of the World Economic Conference in an address delivered in the Town Hall to-night. The occasion was a citizens’ reception to Mr Forbes, Mr Masters, and other members of the New Zealand delegation to the conference. In spite of inclement weather there was a representative assembly, and the speeches of the Prime Minister and Mr Masters, which reviewed the events of the conference, the work of the delegation, and the economic and trade outlook in Britain, were frequently punctuated with applause. Reviewing the work of the conference, Mr Forbes said the question of central banking was particularly interesting to New Zealand in view of the • proposed legislation to establish a central bank in the Dominion. “ This discussion was carried on by leading authorities and representatives of many central banks in other countries. The universal opinion was that the necessity for a central bank as part of the financial machinery of a country admitted of no argument and that the unsettled state of currencies and exchanges throughout the world made its functions more than ever necessary. The value of consultation between the central banks and the interchange of information on monetary movements and policy were considered to be very great. The knowledge thus secured by the central bank enabled it to carry out its financial policy with some degree of confidence and with a greater chance of success than if it lacked that information. Further, the co-ordination of central banks was considered essential to monetary stabilisation." Mr Forbes said the conference had been in session for nearly seven weeks, and when the adjournment took place there had been a feeling of disappointment that it had accomplished so little. < “It certainly started off with an ambitious programme and high hopes, but when one considers that the matters that had to be dealt with covered the whole field of finance and economics and that the agreement of 64 different nations had to be secured, it is little wonder that it fell short of the expectations of its wellwishers. The sittings, however, enabled a great deal of useful work to be done and afforded i an opportunity for an interchange of views between the representatives of the various countries. The immediate cause of the breakdown of the conference was the inability of the Government of the United States of America to co-operate in any scheme for financial stability. After a visit to that country and hearing at first hand of the serious internal position which had come to a head in the early stages of the conference, one could appreciate the stand taken by the President. The decline in the exchange value of the' dollar had to take second place to the urgent need for an improvement of the domestic situation in the United States, and therefore the desire of the European gold bloc for stabilisation could not be made through force of circumstances. Hence the impasse that occurred.”

Referring to the meetings held during the sitting of the conference between representatives of the dominions and the British Government, Mr Forbes said that after, several lengthy discussions it had been admitted that the quota on butter presented many difficulties, and it was decided to allow it to stand over in the meantime. The question of a quota on cheese was then pressed, the British Minister of Agriculture (Major Elliot) stating that the Government had just launched a scheme of milk control which could only be successful if the market price of cheese were raised from its then low level. ..“We drew attention to the fact that there had been no increase in the amount of cheese imported into Great Britain, and that therefore the price could not be attributed to a glutted market. We also pointed out that if cheese imports were restricted it would cause a change-over to butter manufacture to the extent of the surplus quantity of cheese above the quota, and, further, that it would press entirely on New Zealand. We contended that cheese could not be considered apart from all other dairy produce. The Minister of Agriculture continued to stress the fact that the success of the milk scheme depended upon the price of cheese, that the price had to be raised, and that only a quota restriction would do it. As we were anxious to preserve goodwill we suggested that if would be helpful' if a representative of the farmers could visit New Zealand and discuss matters with the farmers here. This invitation was accepted and the National Farmers’ Union has arranged for Mr Thomas Baxter to come to the Dominion.” Mr Masters, in the course of his address, stated that there was steady confidence in the minds of the public of Great Britain at the present time and the Home Country to-day was leading all countries so far as an increase of trade over the past two years was concerned. The figures of the three principal savings banks, which could be classed as the working people’s banks, showed that for the six months from January to June of last year the savings increased by £26,000,000. The best indication he could give of a general return of prosperity in Great Britain was that the unemployment registrations showed a reduction of 454,000 persons for the first five months of the present year. While the unemployment figures, were increasing in moat other countries, it was pleasing indeed to know that there was a huge decrease in the returns in Great Britain. There were 144,000 fewer unemployed in June last compared with the same month of last year. All this had had its effect and was reflected in the increased prices received for New Zealand primary products in the English market.