WORLD DIFFICULTIES.

Otago Witness, Issue 4069, 8 March 1932, Page 67

WORLD DIFFICULTIES.

ECONOMIC SITUATION TO-DAY PROFESSOR FISHER’S OBSERVATIONS Several of the economic problems with which the world is beset to-day were outlined by Professor A. G. B. Fisher, of the University of Otago, who has just returned from an extended tour of the world, in the course of an interview with our representative last week. “My tour of the world in 1931 left me with a very strong impression of world interdependence,” Professor Fisher said, “ and while the causes of the present difficulties are very complex they are more intensified by the unwillingness of many people to recognise this basic fact. This shows itself markedly both in currency developments connected with the supply of gold, and in attitudes to international trade.” TARIFFS AND DEBT REMISSION.

Professor Fisher went on to say that many people were apt to be impatient with the apparent ineffectiveness of economists at the present time, but economists could justifiably point out that in 1927 at the World Economic Conference they had been unanimous in condemning the trend towards high tariffs, and the fact that so little attention had been paid to the criticism was partly responsible for the present crisis. The fact that the crisis was equally sharp everywhere indicated the incompleteness of all the local explanations | which had attracted so much notice. This was especially, obvious in the case of the United States. There was a very general feeling in the United States against any further concessions in the remission of debts, and many people there emphasised the inconsistency of high naval and military expenditure and the alleged inability to pay the debts. At the present time many Americans were rather proud of their ability to maintain the gold standard, but this was partly a matter of prestige, and it was not clear what significance could be attached to the gold standard if many other important countries determined to abandon it. The suddenness of the crisis had greatly stirred public opinion in America, and, though the reaction was often more emotional than rational, a good deal of fundamental thinking was also being done, and in some directions opinion was being adapted very rapidly to changing circumstances. The question of public relief had been hotly debated, and there had been a surprising movement of opinion in favour of some sort of organised unemployment insurance. One State. Wisconsin, had passed an Act for this purpose in January, and, though its proposals were very mild, it would have been impossible to carry them even as recently as two years ago. There was a great deal of talk in America about, economic planning, though much of this was still very vague. Speaking of tariffs, Professor Fisher said that one of the factors on which recovery depended was the possibility of a change of public opinion in that connection. The anticipated recovery of export trade in Great Britain after the abandonment of the gold standard had been rather disappointing, partly because the extreme economic difficulties of other countries often led them to adopt policies of exchange control, which made it very difficult to arrange for payments to England.

THE GERMAN SITUATION.

The outstanding fact in the German situation was the impetus given to the extremist parties, both of the Right and of the Left, by the harsh policy adopted by some European Powers in relation to Germany. One Communist said very cheerfully that he was very pleased with everything that France was doing, '>r French actions invariably increased the size of the Communist Party. Nevertheless, there remained a powerful core of moderate opinion, which under extremely difficult circumstances was endeavouring to carry out a rational policy, and it was quite astonishing to meet many Liberal Germans who took a purely objective view of the international situation, and were able to appreciate with surprising sympathy the French point of view. Many tourists had been inclined to doubt the reality of German poverty, but while Germans seemed always able to maintain their self-respect even in the most difficult economic situation, there was no doubt that the world crisis had hit Germany more severely than it had hit many other countries. Both President Hindenburg and the Social Democratic Party deserved very great credit for taking long statesmanlike views of their country’s position, and it was largely due to their self-sacri-fice that the present Government had been able to maintain its position. The devotion of some of the rank and file Nazis to their leader was very remarkable, but their attitude was a purely emotional one and a return to normal economic conditions would certainly greatly reduce the significance of their party.

The stigma which it was belie’'- d was cast upon German people by the clause of the Peace Treaty which placed the sole responsibility for the war upon them was seriously felt in Germany, and all parties agreed that this should be removed. Germany, therefore, did not view the reparations question as a purely economic one. but naturally associated it closely with the question of war guilt. -

THE GOLD STANDARD. Recent events had caused a larger number of people than ever before to consider seriously whether the traditional management of the gold standard provided a satisfactory currency basis. Some English authorities were anxious to return to gold later, but even they agreed that it would be unwise to do so without a more definite assurance than had hitherto been given of effective co-opera-tion between the national and Central Banks. The close connection between economic and political problems was seen most clearly in the distribution of gold. It was not correct to suggest that France and the United States had deliberately or maliciously accumulated gold, but their respective Governments had followed policies in connection with debt payments and tariffs which made the accumulation of gold almost inevitable. To that extent the credit upsets that followed were their responsibility. THE LEAGUE OF NATIONS.

Five months’ residence in Geneva strengthened Professor Fisher’s impression that the weaknesses of the League of Nations, very serious as they were, were much more the weaknesses of Governments and of public opinion than of the machinery of the League. The members of the Secretariat were eager to do everything possible to make the League effective, but their scope was invariably limited by the timidity of statesmen, who seemed always afraid lest they should lose some support in their own countries. Professor Fisher was present at the conference of the World Association for Adult Education in Vienna, attended by I delegates from many European countries. It was clear, he said, that growing attention was being paid to various aspects of adult education in nearly all countries, and people of quite divergent views seemed agreed that advances of this kind would make an important contribution to the solution of current difficulties.