The Timaru Herald SATURDAY, DECEMBER 9, 1933. REFORMING THE LEAGUE.

Timaru Herald, Volume CXXXVII, Issue 19668, 9 December 1933, Page 8

The Timaru Herald SATURDAY, DECEMBER 9, 1933. REFORMING THE LEAGUE.

It is not surprising in view of the vital issues involved, that Italy's plan to reform the consttiution of the League of Nations has received a somewhat mixed reception. “It is felt,” says a message from Rome, “that the League of Nations has become part of the machinery for enforcing treaties which have perpetuated the division between the victor and the vanquished and thus led to domination by France and Britain.” This is an intriguing statement, in view of the traditional friendship between Italy and Britain that existed prior to the ascendancy of the Black Shirts. But Italian opinion has developed along strange lines with decided pro-German tendencies. The Fascist Grand Council, for example, has decided that Italy's continued membership of the League of Nations, shall be dependent on the speedy radical reform of the constitution and objectives of the League. Opinion in London, however, indicates that the demand for a revision of the constitution of the League of Nations has caused no surprise, though it was not expected to be so peremptory. Further elaboration of the Italian plan for the reform of the League reveals the fact that Signor Mussolini wants the League of Nations to include Russia, America, Germany, and Japan, and would like an extension of the economic activities of the League, embracing international distribution of raw materials. It is not surprising that the Italian plan has been most favourably received in Germany; indeed, Berlin newspapers describe the Fascist Grand Council's resolution as Signor Mussolini's ultimatum, and warmly welcomes it as the first step toward the revision of the Versailles Treaty. Unhappily, for Signor Mussolini, German diplomacy has cultivated an unhappy knack of rushing in where angels fear to tread. Already the calmer mind of well-trained French diplomacy has come to the considered conclusion that the Italian proposal for the reform of the League is fraught with danger. The hand of Germany has been disclosed in the precipitate rush of the German-controlled press to tell the world that Italy in effect, aims at the revision of the Treaty of Versailles. It is just as well that Europe should realise that for the moment there is and can be no danger of an open conflict, since Herr Hitler’s withdrawal from the Disarmament Conference and the absence of his representative from Geneva, has not relieved Germany of a single treaty obligation:

In the first place, Germany’s resignation of League membership will not take full effect for two years. Thus her relations with the other Powers will continue for some time to come, to be regulated by the stipulations of the League Covenant, which prohibits any aggression by one Power against another.

This ban on war is reinforced by the adhesion of Germany and of all her neighbours to the Kellogg Pact, by which they undertook to renounce war as an instrument of national policy and to submit all their disputs to a settlement by pacific methods. Yet more precise and peremptory than these two multilateral agreements is the Locarno Rhineland Pact. Under this Treaty Germany and France (and Germany and Belgium) mutually pledged themselves not to attack or invade each other, and agreed, in special treaties, to submit any dispute between them to conciliation, arbitration, or judicial settlement.

Other treaty obligations direct the policy of other European Powers, for instance, Britain and Italy, under the same Rhineland Pact, agreed to guarantee, by force, if necessary, the existing Franco-German and Belgo-Ger-mnn frontiers against a direct and unprovoked aggression by either party. In the same way Britain and Italy guaranteed the inviolability of the demilitarised Rhine zone established by the Versailles Treaty, by either Germany or France. This AngloItalinn guarantee was recently and simultaneously reaffirmed by Britain and Italy. It has been further implemented by the FourPower Pact concluded between Britain, France, Italy, and Germany, which provided a new method of smoothing away such differences as might arise between themselves by direct and frequent consultation. Obviously Italy and Germany are indulging in a little diplomatic kite-flying, since in a word, Locarno, set up a kind of “iron curtain” between France and Germany, which either would hesitate to pass without the sanction and support of the British and Italian guarantors. Indeed, an international authority in Professor Maurice Gerothvohl insists that, even if Germany had the will she would still lack the means to wage war in defiance of such definite treaty obligations involving herself and her neighbours. AFSTRALIA'S IIIOH CREDIT. Xo more conclusive evidence of the faith of the British investors in the future of Australia has been afforded than the oversubscription in two hours of the I Commonwealth conversion loan ■operations involving £16,647,349 [ at 3} per cent, issued at 99. The

other day it was reported that excluding the sum underwritten in this week's operations, only £17,554,000 in Australian optional loans remain unconverted in London. The delay in the present operation, which Mr Stanley Bruce was ready to launch weeks ago, was due, we are told, to the unsatisfactory state of the market owing to, uncertainty about the dollar. The last few days, however, have seen only a slight improvement, but Mr Bruce apparently decided to take a somewhat sporting risk before the arrival of the unsettling Christmas atmosphere. The new conversion, at 3| per cent, issued at 99, gives a yield of £3 15s 9d and a redemption yield of £3 16s 9d, which Mr Bruce regards as flattering to Australia in view of the market conditions. The successes' of Australia's loan conversion operations in London, have demonstrated the strength of the country’s credit in the financial centre of the world. In the hour of almost bewildering crises, the financial leaders of Australia designed a policy that would help the island continent out of its difficulties. The remedies proposed were so unpleasant that they returned little but unpopularity to responsible parliamentary leaders. Nevertheless, Australia persisted in carrying through a recovery plan which has yielded magnificent results. So much so, that the country had almost regained financial and economic equilibrium at the very moment that the recovery in the wool trade send a thrill through the wool growing countries of the world. Having builded in a sure foundation, Australia is sound at heart with an economic constitution undamaged by artificial remedies. Currency reform quacks and prescribers of dangerous nostrums have been kept in their places in Australia, with the most gratifying results. Hence the instant uplift enjoyed by the great country the moment the stimulating influences of returning prosperity began to pulse through the veins of the whole economic structure, in the shape of rising wool markets. Thanks to the inherent good sense of the Australian leaders and the great mass of the people, the finances of Federal and State Administrations are being stabilised and the economic life of the community is rapidly approaching normal conditions. Here we have the explanation of Australia’s high credit in London; moreover, the brighter outlook for the wool industry has given the country such an invaluable lift that the returning prosperity coming as it has done under such rapidly improving conditions, should create such universal feelings of confidence that Australia this year will enjoy a festive season such as the country has not experienced for many a year.