The Wanganui Chronicle. "Nulla Dies Sine Linea." FRIDAY, MARCH 24, 1922. THE ECONOMIC OUTLOOK.

Wanganui Chronicle, Volume LXXVI, Issue 18439, 24 March 1922, Page 4

The Wanganui Chronicle. "Nulla Dies Sine Linea." FRIDAY, MARCH 24, 1922. THE ECONOMIC OUTLOOK.

Although New Zealand, in common with the world in general, can never hope to revert to pre-war conditions, it may ba taken for granted that she will gradually emerge from I her economic difficulties. One of the most hopeful indications is that the balance of exports over imports is tending in the right direction. By heeding the insistent call for greater production we can do much towards working out our own salvation;- but nevertheless it has to be remem-

bered that we cannot live unto ourselves alone and that we are vitally concerned in the whole question of the world’s economic outlook. At the basis of the position are the wrecked exchanges of Russia, Pc land, Austria, etc., denying them any hope of participating to any extent in international commerce, and it has been correctly- stated that until the economic paralysis of these countries is healed the rest of the world, New Zealand of course included, must continue to bear anxious burdens. This fact, says one thoughtful writer, was not realised in the days of extravagant nationalism, which succeeded the defeat of the Central Powers, but to-day all nations are being forced to realise the inescapable truth of the world’s economic interdependence. It is possible to understand how this principle was overlooked immediately after the signing of the armistice, for the reason that the artificial props furnished by America to keep the exchanges reasonably stable had not then been withdrawn. They were withdrawn soon afterwards with disastrous results to the various exchanges—results which to-day have expression in the economic distress of Europe. To find a way out of this distress is the task which has been set for the Genoa Conference, which, according to the cables, will meet early in April. The man in the street is inclined to wonder at the manner in which financial buoyancy was obtained during the war as compared with the widespread dislocation which succeeded the fighting It has to be remembered that, in the first three years of the war, productive labour was directed to the battlefield or to the army workshops. The Allied countries had to rely for food and other forms of production upon neutral nations, notably America. This meant the gradual concentration of world finance in the United States. To pay for our goods we had to pay cash on the dollar basis. Unlike pre-war days, we could not pay in goods. And it is doubtful if we could have paid had not private British citizens possessed American securities capable of use for payment of cash on the dollar basis. With America's entry into the war, the Allied nations had to depend more and more upon American credit for their external requirements. When the war ceased, America ceased to make further advances to the Allies —the credit prop was suddenly withdrawn, and Europe was forced to face the question of restoring her shattered exchanges. The exchanges crashed, and it is only now that there are signs of definite recovery. In the opinion of the writer from whom we have 'quoted, America has not assisted as she might have done. She has been anxious, he says, to hoard her gold, and has been slow to avail herself of the opportunities for European financial reconstruction presented by her wonderful position in the matter of the balance of trade. More than that, she added some feet to her tariff wall,, thus harassing the efforts of other countries to improve exchange rates by export of goods. Her concern has been the pursuit of the ideal of commercial supremacy, rather than the more reasonable objective of stable world conditions. This race for commercial superiority, without thought of international obligations, has contributed to a considerable degree to the anxious condition of Europe to-day. However, the conference which is to be held at Genoa may result in a more sensible scheme for an improvement in world finance. Money is but the expression of the value of production, and hence there can be no real improvement in world finance until great producing countries such as Russia and Germany, etc., are able to play their part in world trade. The Genoa Conference offers a fine field lor constructive effort. Ail nations, including France, which formerly had no other outlook but Germany and her suspicious reactionary movements, will be represented, and it is impossible to think that some scheme of international organisation will net be evolved to secure escape from the present position.