SUPREME COUNCIL.

Rangitikei Advocate and Manawatu Argus, Volume XLV, Issue 12010, 12 March 1920, Page 7

SUPREME COUNCIL.

THE ECONOMIC SITUATION. United Press Association—By Electric Telegraph—Copyright. London, March 8. Newspapers contain a forecast of the Supreme Council’s economic memoranda. The main lines are in accord with the forecast. The keynote of the manifesto is said to be necessity for restoring Germany and Russia economically. Until that is done effective recovery of Europe generally is impossible. Russia’s first requisite is peace and the second is reorganisation of transport. The Council urge? that the States bordering on Russia should accept any reasonable terms. This would enable resumption of trade and, the importation into Russia of necessary railway material, to whiih the Soviet Government attaches the greatest importance. The Council consider* Germany’s principal need is a precise statement of her obligations under the Peace Treaty. As to the reparation clauses, it is not proposed to revise the Treaty in this regard as wide powers are already vested in the Reparations Commission, The Council therefore urges the Commission to proceed without delay in fixing the amount Germany must pay. To enable this to be done, Germany will be requested to rurnish her own estimate, as arranged before the Treaty was signed. The proposal for allowing Germany to raise an external loan presents the greatest difficulties. It is believed Germany’s economic restoration depends on a substantia foreign loan, which, however, is unlikely to he forthcoming if repayment must wait until the indemnity is wiped off. On the other hand, Prance urgently needs payment of the indemnity in order to restore the ravages to industry. 2 While, therefore, the Council suggests that repayment of the loan should take precedence of the indemnity, payment should be subject to certain safeguards. It is likely modifications will be made based on the French representations, which have now been presented to the Council. The memorandum also emphasises the necessity for strictly limiting expenditure on armies,and navies, and for friendly international relations and Governmntal economy.

° FRENCH OBJECTIONS. London, March 9. Messages from Paris state that the French Ambassador in London has been instructed to sign the memorandum with the following reservations (1) France declines to press that border States shall make peace with Russia. (2) Reparations under the Peace Treaty most take precedence over loan repayments. An official communique from Paris says The French Government’s objections to the memorandum are mainly based on the view jthat the terms of the Peace Treaty"must be rigidly performed. France refuses to accept the disguised revision of the powers of the Reparations Commission. Negotiations on these points are in progress. The uaily Telegraph’s Paris correspondent says French feeling is deeply stirred by the report regarding the Council’s memorandum, The French people cannot forget, even if they wished, what damage the invaded areas have suffered, and cannot tolerate the proposition, that Germany’s economic straits should be placed on the same footing as France’s, which are so largely the result of Germany’s invasion. The Daily Telegraph says; There is extreme nervousness in France lest France may after ail, be cheated out of her due, and she considers that the other Allies have realised their aims, including Britain, which sqes the German navy, maritime commerce and colonies destroyed. France alone is in danger of getting little save burdens. Even Alsace-Lorraine is not an acquisition, bat merely the restoration of stolen property. GERMANY’S NEED. Paris, March 8. " The Journal’s Berlin correspondent states that tho German Government has drawn up economic memoranda for submission to the Peace Conference showing that in order to obtain food supplies Germany nee Is a loan of forty-two milliards marks in gold. It also asks for modification of the Rhine occupancy, and finally' declares that if the terms are not accepted Germany will declare bankruptcy next autumn.

THE RECOMMENDATIONS. London, March 9 The declaration on the economic conditions of the world, approved by the Supreme Council yesterday, states that the Council, after carefully surveying all aspects of the vitally urgent problem, agreed upon the following recommendations, with a view to the amelioration of the present economic difficulties in Europe Firstly, it is of paramount importance that peace conditions should be completely restored at the

earliest possible date throughout the world. In order to achieve this objcet it is desirable—a. That peace and normal economic relations should be re-established as soon as possible throughout Eastern Europe! b. That the armies should everywhere be reduced to a peace footing, that armaments should be limited to the lowest possible figure compatible with national security and that the League of Nations should be invited to consider as soon as possible proposals to this end. c. That States created or enlarged as the result of the war should immediately re-establish full friendly co-operation and arrange for unrestricted interchange of commodities in order that the essential unity of European economic, life may not be impaired by the erection of artificial economic barriers. Secondly, not only the Government of each country, but producers, should immediately attend to the execution of all measures contributing to the full resumption of peaceful industry, tho encouragement of better output by the workers, the improvement of machinery and the means of transportation and the removal of disturbing features such as profiteering. Thirdly, each Government should immediately consider means of urging upon all, as a national and vital necessity, the suppression of extravagance and the reduction of expenditure, in order to bridge the gap which mnst exist for some years between demand and supply of essential commodities. Fourthly, it is essential to take early -steps to secure a deflation of credit and currency—(a) by redaction of recurrent Government expenditure within the limits of revenue; (b) by the imposition of additional taxation necessary thereto; (c) by immediate limitation and gradual curtailment of note circulation. Fifthly, provision of raw materials being essential to the restoration of industry, means should be found by which countries at present unable to purchase in the world markets can obtain commercial credits. It should

be possible to achieve this when tho countries made the reforms previously indicated. Sixthly, the Conference recognises the necessity for the continued cooperation of the Allies and the removal of obstacles to the easy interchange . of essential commodities. The Allies will continue to consult together in regard to the provision and distribution of necessary raw materials and foodstuffs, in view of the early restoration of normal conditions. Seventhly, the Conference gave careful attention to the case of devastated regions, especially North France. The restoration of these regions is of primary importance to the re-establishment of the economic equilibrium of Europe, and the resumption of normal trade conditions. Evidently the large sums required in this connection cannot be provided out of current revenue, nor can the work of restoration be postponed until reparation from Germany has been received. Therefore the Conference recognised that the capital sums required for this restoration may , properly be raised by market loans in anticipating' the reparation payments, provided the Peace Treaty and the restrictions which they ■ desire to see placed on new borrowing do not apply to loans credit to meet this normal capital expenditure. Eightly, the Conference agreed that it is desirable in the interest, both of Germany and her creditors, that the total reparation' payable by her should be fixed soon, and agreed to extension of the period to four months from signature of the Treaty, in which Germany will, be entitled to make proposals in this connection. The question of allowing* Germany to raise a foreign loan will be referred to the Reparations Commission.