A GREAT TASK

Poverty Bay Herald, Volume LX, Issue 18064, 15 April 1933, Page 6

A GREAT TASK

WORLD ECONOMICS THE .COMING CONFERENCE GENEVA OFFICIAL’S VIEW A survey of the complex interdependent problems which must be dealt with by the coming World Economic Conference was given by Mr E. J. Riches, of tiie economic research staff of the League of Nations International Labor Office, Geneva, at a mceaag of the Auckland branch of the Economic Society of Australia and New Zealand. Tho conference would be almost without precedent, said Mr Riches, inasmuch as no attempt had been made to deal with any previous depression by international action. The central fact in the present world economic situation was the disastrous shrinkage which had taken place during the [last three years in the volume and value of world trade, upon which the modern world economy was dependent for its 'very life. Until existing barriers were removed there could be no revival of either world trade or world prosperity. All the resources of economic nationalism had been tried in the past few years by individual countries,.and tho effect, had been merely to aggravate the 'situation. The only way out of the inipasse was by concerted international action.

N EED ;FO R MONET ARY STAN D ARD The first and most urgent part of the conference’s work would probably be to restore a fairly stable monetary standard, without which trade could not survive. To do this it must reach agreement on a new set of parities between the various currencies.

A solution must first be reached for the international debt problem. The prospects of survival of any particular set of exchange parities would also be dependent on the height of tariff' barriers and the future course of world trade. Before any final decision could be reached as to parities, the conference must therefore give some consideration to future tariff policy. Thus it would have to deal almost simultaneously with three closely interdependent problems—international indebtedness, exchange parities and trade barriers. At least one other essential prerequisite to the successful working of an international monetary system must be considered by the conference, namely, the institution of a closer and more regular co-operation among the central banks of the world to maintain a common monetary policy. BARRIERS TO TRADE As regards . the reduction 'of trade barriers, the Preparatory Expert Committee, which met in January last, had agreed unanimously that prohibitions, quotas and currency exchange restrictions should be removed as soon as possible. There had been less agreement as to tariff policy, some urging a policy of reduction by percentages and some a reduction to a uniform level. The most-favored-nation clause was also likely to cause difficulties, but certain temporary exceptions might be arranged. * A first step towards tariff reduction might be the inauguration of a tariff truce such as that proposed in 1929 and adopted by Belgium, Luxembourg and -the Netherlands in a special convention last year. Mr Riches emphasised that In international, as in national, economic reconstruction it would be necessary to adopt new methods and new ideas. It seemed safe to affirm that there would be a strengthening of the recent tendency towards a greater degree of conscious direction and planning, both national and international, in economic affairs. In the present situation there was no reason to expect that tho automatic readjustments on which a competitive economic system normally relied would be adequate to promote an early recovery.