The Star. FRIDAY, JUNE 23, 1816. EDITORIAL NOTES.

Star (Christchurch), Issue 11732, 23 June 1916, Page 4

The Star. FRIDAY, JUNE 23, 1816. EDITORIAL NOTES.

THE ALLIES AND TRADE. Tho cabled summary, of the trade .. \gr£ement between the Allies, arrived a$ as the result of the Economic Conference in Paris, will no doubt bo sup- ' plemented presently by some details of tho suggested anti-enemy measures in commerce and industry. It is clear, however, that a broad, solid foundation has been laid for the great task not only of rebuilding the economic fabrio of those countries which have suffered most by the war, but ' of., strengthening the whole system of production and of peaceful progress and business intercourse among the nations now engaged in tho great struggle against the Central Powers. The recommendations unanimously agreed upon by the representatives of tho . Entente nations fall into three divisions. First there are the outlines of measures for the wa* period, covering the methods to b§ adopted for the complete rooting out of business with the enemy countries, and measures to the blockade. The second division, immediately following the war, . broadly outlines the steps to be taken to ensure the'industrial and commercial reconstruction of the Allied countries and emphasises the spirit of mutual help and of interdependence in the work of the development of natural resources and of trade reorganisation. The third . . and most vital set of resolutions lays ; down a platform for the permanently '. sound establishment' of the Allies as prosperous producing and trading nations and for their independence of the enemy in both' raw material and manufactured goods. The exact means'to bo taken to give effect to the vast programme will be left to the Governments of the several countries concerned, but, on the principles and general ! methods of action there is a cheering unanimity. j A point, however, on which more precise information would be welcome , is the position of Italy in relation to Cle economic agreement. Italy is not as'' war with Germany; she is fighting Austria, but thus far she and Germany have refrained from open declarations of war. German-Italian business relations are intimate and deep. Germany has hundreds of millions of capital invested in Italy, and has secured a most powerful grip on Italian trade and commerce. If Italy is now willing to bind herself to the steps agreed upon by the conference it follows that she will "Be able to deal Germany an economic blow of terrible force. Ratification in Rome of the resolutions agreed upon "by the delegates in Paris involves a definite statement of hostility to Germany. It is probable, however, that Ene first open declaration of war will bome from Berlin. The aspect of the economic programme which is most comforting to those who reab'so the cleverness of the enemy's bid for world domination in trade and industry is the repeated reference to the need for united action in the development of tho Allies' sources »£ supply. The most pregnant clause in , this far-reaching commercial plan of campaign is that which states, under the fiead of "Mutual Assistance": — "The Allies decide to take the necessary steps without delay to ren- • der themselves independent if enemy countries in so far as regard* law material and manufactured articles essential to the normal development of their economic activities. Theso measures should be directed to assuring fh'e independence of the Allies, not only as far as concerns their source of supply, but also as regards their financial, commercial and maritime organisation." It is only since tho war began that the British peoples have awakened to a knowledge of the skill and determination with which Germany has endeavoured to obtain a strangle-hold on certain industries, not alone in metals such as spelter and other materials rital to the manufacture of munitions , of war, but in some of the lines most 'Essential to a nation's industrial success. We know now, as Mr Lloyd George has most strikingly emphasised, that Britain and her friends can never again permit Germany to obtain such & grip upon the world's metal resources. H In the whole range of material neetlHfeful for the making commodities in ■■world-wide demand, the enemy has inH|deed displayed an energy and a cunHBuing which threatened our own pcoplo

positive disaster, in certain branches of .business. The German scientific mind was brought to bear with intense earnestness upon the profitable working up of raw materials from all quarters of tho globe, with the goal of industrial world domination always in view. No longer shall we rely upon Teuton science and Teuton skill and labour for articles indispensable to. our everyday life'. What we cannot produce ourselves with convenience or profit wo shall obtain from our Allies, and in return our manufactures will bo stimulated by tho new markets opened up for us in Europe.

The clause making brief reference to enemy shipping is of particular interest, and we shall no doubt in due course bo made acquainted with the details of tho proposals. In our own country, Sir Joseph Ward some months ago advocated very drastic treatment of enemy shipping, and it is evident to all who know how carefully the Berlin Government has fostered the cation's mercantile marine that we shall be foolish if we neglect to take timely measures against the enemy's schemes for the command of the great trade routes. Only a little while before the war began it was announced that a big German line of steamers vas about to extend its operations to New Zealand in opposition to British ivessels; and this no doubt was to be linked up with other efforts aiming ultimately at the shipping control .of the Pncific. Happily these plans have been destroyed; nevertheless the Germans aro already looking far ahead, and it is well that they should be given such a wholesome and permanent check as thai which is crystallised for the world in the Paris Conference resolutions. THE BUDGET. The unexpected opportunity afforded the House to discuss the Budget did not produce any striking criticism, and the public will probably arrive at tho conclusion that in the main Sir Joseph Ward's proposals were satisfactory to members. One or two items we cannot endorse, but it may be that the Minis-ter-of Finance is erring on the side of caution, and is providing against a prolonged campaign by gradually building up a financial structure that will meet all requirements. The suggestions made by members show that the Minister can tap other sources of supply, and the excess profits tax can be increased materially should necessity demand such a step. The Dominion will take 45 per cent and* the Commonwealth 60 per cent of excess; profits; and, as this is pureb a war tax that W 'U cease with the conclusion of hostilities, circumstances may prove that we have made a mistake in Dot appropriating to national uses a higher percentage of profits which are due solely to war conditions.

The ' cable message fronT % London regarding the graduation of the tax on unearned incomes places in an unfavourable light the proposal to impose an increased tax of 5 per cent on all incomes of over £3OO. The proposal means a, reversal of the system adopted in New Zealand in that it does not regulate the burden to the carrying capacity of the taxpayer. The tax should be graduated so that the bulk of the burden may f,all on" the shoulders, of those beat able to bear it. The House will be given an opportunity later on to consider this matter, and it is to be hoped that the members will endeavour to secure an amendment m this proposal and apply to the special income tax the principle adopted Regarding the ordinary tax. The absence of criticism may be regarded by the Minister of Finance as a distinct com.pliment, but it is to be hoped that when the measures giving effect to his proposals are introduced the House will carefully consider the two outstanding points—the excess profits tax and the graduation of the special income tax. ; LEE'S VALLEY. j The decision to throw open Lee's Valley for closer settlement early next year will be received with a great deal of satisfaction by many people. The area subdivided is only 33.000 acres, end includes the land lying to to the east of the Ashley. The Government acquired the two freehold' blacks in the valley, and these, together with the leases, are to be cut up for settlement. I The Snowdale leases on the other side of Lee's Valley must expire soon, and then a much larger area should be available for subdivision. l'he valley ;s well watered, but a considerable area is only summer country, and doubtless many intending applicants will have plans for wintering their sheep on the plains. Access to the valley is practically confined to the road through the Ashley Gorge. There is an alleged route, called O'Halloran's track, that comes down the Okuku Gorge, and a long and difficult route touches the valley at its northern end. There is much excellent sheep country in Lee's Valley, and when the Snowdale leases expire and the land is cut up the hinterland of Oxford should carry quite a large population. At the present time it is a placo of magnificent distances, containing two or three shepherd's huts.