PRESIDENT’S POLICY OF ISOLATION

Timaru Herald, Volume CXXXVII, Issue 19523, 24 June 1933, Page 17

PRESIDENT’S POLICY OF ISOLATION

CONFERENCE CIRCLES CONCERNED ATTITUDE OUTLINED BY DELEGATION United Press Association—By Electric Telegraph—Copyright (Received June 23, '1.30 p.m.) LONDON, June 22. British official circles refuse to- be downcast by the rebuff caused by the American failure to support the earlier temporary stabilisation project. They state that time must be given to see the effects of President Roosevelt’s measures for the recovery of prices. The present rises have only affected existing holders of stock, and have not yet reached the producers. Britain and America are agreed as to the necessity of stabilisation, the only difference being when this should take place. “The Times” Comment. “The Times" in a leader, regretting President Roosevelt’s refusal to agree to a currency truce, emphasises that it was hoped that he objected merely to the terms and arrangement, and did not oppose the principle of keeping the dollar stable while permanent stabilisation was discussed. The abandonment of that hope may be very disconcerting. Any great depreciation of the dollar in sterling or francs, unless balanced at least by a corresponding rise in dollar prices, is likely to depress prices below the present disastrous levels, and might force other countries to adopt protective steps similar to those when Britain abandoned the gold standard, thus creating an atmosphere unfavourable to the Conference. Nevertheless it may be taken that President Roosevelt understands the danger of uncontrolled inflation, and will be prepared to call a halt when American prices are restored to a tolerable level, and perhaps comparatively quickly.

Influence of Inflation. The City Editor of “The Times” says: “If President Roosevelt succeeds in raising prices generally, the whole world will benefit, but inasmuch as no case is recorded wherein a depreciated currency has succeeded in raising world prices, as distinct from domestic prices, the City Editor believes the experiment will be attended by grave risks. There would be less anxiety if the world was confident that President Roosevelt will be able to stabilise the dollar when it reached a certain point, but it is feared that political opinion will later be as strongly opposed to stabilisation as to-day, because it will involve the cessation of inflation and check the local rise in prices. It is also argued that once inflation stops, deflation automatically begins, owing Ho the withdrawal of the impetus fresh purchasing power."

MEETING FINANCIAL PROBLEMS. STATEMENT BY AMERICAN DELEGATION. United Press Association—By Electric Telegraph— CopyrlKUt (Received June 24, 12.55 a.m.) LONDON, June 23. The American Delegation on the Monetary Commission, has tabled a resolution largely in harmony with Mr Chamberlain’s motion, regarding readily available credits, but urging serious encouragement of private enterprise through Government expenditure. The Americans suggest that such expenditure might readily be financed by borrowing, provided the debt service is covered by balanced budgets. After urging a synchronised programme of Governmental expenditure in different countries, along parallel lines, the resolution suggests that the issuing banks of the various nations, should send representatives to London immediately for the purpose of consultation and the appointment of the Conference Committee, which would report for the guidance of individual nations regarding a working programme.

STABILISING CURRENCIES. AMERICAN ATTITUDE DEFINED. British Official Wireless RUGBY, June 22. The attitude of the United States regarding the suggested temporary' currency stabilisation was elucidated to-day by the following statement issued by the American delegation to the Conference: — “Undue emphasis has been placed upon the consideration of the plan proposed for a temporary de facto stabilisation of currencies. The fact is that this was never an affair of the delegation. It was considered by the representatives, treasuries and central banks of the United States, Great Britain, and France. Dr Sprague Haiton had been specially sent to represent the United States Treasury for this purpose. As to its ultimate objective, the American delegation has already introduced a resolution designed for a ultimate world-wide stabilisation of unstable currencies, and is devoting itself to support measures for the establishment of a co-ordinated monetary and fiscal policy, to be pursued by the various nations in cooperation with each other, for the purpose of stimulating economic activity and improving prices.” Later Senator Bouzens, the Republican members of the American delegation, tabled a further motion in favour of close co-operation between the Governments and Central Banks, aiming at making abundant credits avail-

able to sound enterprises, and reinforcing this with the stimulation of employment by Government undertakings in every country.

Russians Pleased. The Russians are gloating over the American resolution. They declare it must strengthen their demand for a withdrawal of the British embargo. Professor Moley’s Mission. The Washington correspondent of “The Times” who is attending the Conference says that according to the American delegation, Professor Moley brings no new instructions and possesses no authority for favourably modifying any phase of the negotiations. If he brings anything, it may be a reasonably reliable calculation of the time elapsing before President Roosevelt is ready to "stabilise” the conditions of domestic markets. Economic Isolation. The special representative of “The News Chronicle” declares that Mr Roosevelt’s dismissal of 80 per cent, of the commercial attaches at American Embassies and Conculates, and the closing of eight commercial offices in Europe, is the first deliberate step toward a policy of economic isolation. It destroys the American overseas trade service, built with infinite care under President Hoover’s direction, and recognised as the world’s most efficient business getter, and estimated to have brought at least 50,000,000 dollars direct trade to America.