WORLD PARLEY

Taranaki Daily News, 21 December 1932, Page 7

WORLD PARLEY

economic difficulties

CO-OPERATION OF AMERICA

POLICY OF MR. H. HOOVER

ROOSEVELT APPROACHED

REMEDY FOR PRICE DECLINE

By Telegraph—Press Assn. —Copyright. Washington Dec. 19.

Co-operation with the President-elect, Mr. F. D. Roosevelt; to secure continuity of the American foreign policy, particularly as to war debts, the world economic conference and disarmament was proposed to-day by Mr. Hoover in a message to Congress. ■ ■ ' ' Lacking Congressional approval for a revival of the war debt commission, the President declared that it was necessary for him to proceed, independently of Congress, to set up machinery for further debt discussions with those nations which had not defaulted. _ He suggested the interlocking of the debt, economic and ■ disarmament Questions, and indicated that a commission on debts would be appointed by him, some of the members of which would also be delegates to the world economic conference set for next year, while others would have liaison with the present disarmament negotiations. The only mention of this subject in the message, to Congress, however, was as follows: “Discussions in respect to both debt questions and the world economic conference < cannot be concluded during my administration, yet the economic situation in the world necessitates the preliminary work essential to its success. The undertaking of these _ questions should not be delayed until after March < • I propose, therefore, to seek the Co-operation of the President-elect in the organisation of machinery for the advancement of consideration of these ’iroblems. DEBT. COMMISSION SCHEME. “A year ago I requested that Congress should authorise the creation of a debt commission to deal With the situations which were bound to arise. Congress did not consider this wise. In the situation as ! it developed it appears necessary for the executive to proceed, and obviously any of its conclusions will be subject to approval by Congress.” The President reiterated , his views against cancellation or reduction without adequate compensations. He said: it would meet with my hearty approval a Congress should decide to re-establish the debt commission. Congressional opposition to any sudi step is so strong, however, that, the chief , executive voiced no hope that, my previous recommendation will ever be fulfilled.” The President only negatively excluded from the’proposed discussions the nations which had defaulted. In. the opening part of his message Mr. Hoover said:’ “It is certain that themost urgent economic effort still before the world is the restoration of price levels. The undue and continued fall in prices and trade obviously have had many origins. One of the dangerous sequences, however, is visible enough in the increased difficulties which are arising between many debtors and creditors. The values behind a multitude of securities are lessened-and the income of debtors is insufficient to meet their obligations, Creditors are unable to.undertake new commitments for fear of the safety of present undertakings. “It is not enough to say that the fall in prices is due to decreased consumption, aid thus the sole remedy is adjustment by reduced production. That is in part true, 1 but decreased consumption is brought about by certain economic forces which, if overcome, would result in a great measure of recovery of consumption and thus recovery from the depression. '■

PRICE MOVEMENT WORLD-WIDE. "Any competent study of the causes of the continued abnormal levels -of prices would at once establish the fact that the general'price movement is world-wide in character, and international influences therefore have part in them. Further exploration in this field brings us at once to the fact that price levels have been seriously affected by the abandonment of the gold standard by many countries and the consequent liability to depreciation of foreign currencies. These fluctuations in themselves, through the uncertainties they create,* stifle trade and cause invasions of unnatural marketing territory, resulting in arbitrary trade restrictions and an ultimate diminished consumption of goods, followed by a further fall in prices. * . 1 . . . "The origins of currency instability and depreciation reach back again to the economic weaknesses rooted in the World War, which have culminated in many countries’ anxieties in regard to their financial institutions, the flight of capital and the denudation of gold reserves, with consequent jeopardy to currencies. "These events have been followed by restrictions on the movement of gold and exchange in frantic efforts to protect currencies and credit structures. These steps have again reduced consumption and diminished prices, and are but parts of the vicious cycles which must be broken at some point if we are to assure economic recovery. We have abundant proof of the effect of these forces within our own borders. The depreciation of foreign currencies lowers the cost of production abroad compared with our costs, thus undermining the effect of our protective tariffs, the prices of agricultural and other commodities in the united States being seriously affected, and thousands of our workers being thrown out of employment through. the invasion of such goods. “I concur in the conclusions of many thoughtful persons that one of the first and most fundamental points of attack is to re-establish the stability of currencies on the foreign exchange, thereby releasing an indefinite number of barriers against the movement of commodities throughout the world. I am well aware that many of the factors which bear upon the problem are purely domestic in many countries, but the time has come when concerted action between the nations should be taken in an endeavour to meet these primary questions. The gold standard is still the only practicable basis for international settlements and monetary stability so far as the more advanced industrial nations are concerned.” “The larger use of silver as a supplementary currency would aid stability in many quarters of the world,” continued Mr. Hoover. "In any event it is a certainty that trade and prices must be < disorganised until some method. of monetary and exchange stability is attained. It is for the purpose of discussing these and other matters that we have joined in the world economic conference, where means and measures for turning the tide of business and price level* through a remedy to some of these destructive forces can be fully and effectively considered and, if possible, undertaken simultaneously between the nAtIOXW* « « "A Ruction in aqaayt* i a

bearing upon these questions. The stupendous increase in military expenditures since before the war is a large factor the world-wide unbalanced national budgets,” concluded Mr. Hoover. A world conference on armaments and money as well as on war debts, as proposed by the chairman , of the Senate Foreign Relations Committee, Senator Borah, in approving action for debt review, was suggested by Mr. Hoover. Republicans • and Democrats alike endorsed the tenor of Mr. Hoovers mesS3 An Albany (New York) message states that Mr. Roosevelt declined to comment on Mr. Hovers message* _ It is the assumption of Washington that Mr. Hoover already has made some overtures toward Mr. Roosevelt and that the personnel of the group which is to handle the debt discussions will be submitted to the President-elect for his approval before its appointment. Inquires at White House and the departments of State this afternoon brought the response that there is no information to be given of any agreement between Britain and the United States for a joint examination of war d cable states that Mr. Wm. Cook inquired in the House of Commons whether? in order tojacflitate the payment of war debts, America and Britain should invite France, Italy, Belgium and Germany to confer with a view to common action to render the balance of trade between Europe and the United States more favourable to Europe. Mr. Baldwin said that the United States had agreed to a joint exammation of the whole question with Britain and he therefore thought the suggested action at present inappropriate.