POINTS of INTEREST

Wanganui Chronicle, Volume 73, Issue 430, 22 November 1930, Page 13 (Supplement)

POINTS of INTEREST

FRENCH FOREIGN POLICY A statement of the principles on which the external policy of the French Government is based was made by M. Tardieu, the Prime Minister, in a speech at Alencon. He said its foreign policy was not an improvisation. It was not the sport of personal or collective action, but was conceived, and carried out, by successive Governments with the permanent control ami’ ratification of Parliament. The people of France were unanimous in their desire for peace, and were striving to organise it both politically and economically throughout the world, especially in Europe. France intended to continue the pursuit of this aim and believed still that the basis of this organisation was to be found in three factors —security, arbitration and disarmament. But to-day, as yesterday, France declined to permit the order vf these three terms to be inverted. Therefore, pending progress in guarantees by contract supported by the necessary sanctions, she would take such steps as her sovereignty and protection demanded. \\ ithin these limits no country during the last 10 years had been so scrupulous as France in reducing land, sea and air armaments. No country had shown by acts its good will for moral pacification and conciliation more than France. They had the impression that their example had not been appreciated, and they drew the necessary inference. Without regret. and without fear. France would remain calm, strong, ami watchful. The Government was clear in its mind that it had neglected nothing in this respect. It had been the faithful defender of the treaties which consti:uted the foundations of peace, in the cause of which it had lately, once again, demonstrated its unity of action. It was the view of the Government, also, as the interpreter of the country’s will, that it would be imprudent and altogether a mistake to allow the asperities of domestic, controvei to hide from foreigners the true fa<-e of France, confident in her strength and her right. REDISTRIBUTION OF GOLD ‘•I can see how the world supply of gold can be theoretically distributed among the gold basis nations on an equitable basis, but 1 do not see how this can be accomplished in a practical way,” another American commentator remarks in a letter quoted by the Economist. ‘‘England, Germany, Japan ami Italy undoubtedly arc short of the amount of gold they should have, ami the United States, 1 rance, and Argentina have more than they require. To move the gold ironi the latter to the former would require the purchase of securities or goods by the latter from the former. Americans are not- disposed at this time to take substantial additional amounts of foreign securities, for the reason that they can purchase equally desirable and profitable securities in their home markets, which they believe, over a period of years, offer better chances of < nhaneement than do the foreign securities / . . The movement of gold from America, say, to Germany through purchase of goods could only come about if Genpany shipped us more than we ship them, and that is a condition which, naturally, every American would be loath to see happen. So long as our trade balance is in our favour it is inevitable that the gold will move toward us instead of away from .us. The only practical way which occurs to me of getting the gold out of our hands and into the hands of Great Britain, Germany. Italy, etc., is through purchase by us of European securities in large amounts and over an extended period of time. This is a matter of education on the one hann and of satisfying our people on the other that the European securities are more attractive as to yield, safety of principal and ultimate hope of principal gain than our own securities.’ MONETARY GOLD STOCKS The contention that the fall in prices has been caused by deficiency in the supply of monetary gold, mainly due to the “sterilisation” of large amounts by France and the United States, ami the consequent lack of “adequate amount of currency and credit,’-’ is contested in the monthly letter issued by the National City Bank «»f New York. One of the most authoritative expositions of the theory is the memorandum by Sir Henry strakoseh. published in July. 'The statistical evidence with which he supported his arguments was confined to the period from 1925 to 1929, but the American writer has made an elaborate analysis of gold reserves in 1912 and 1930 and of banking statistics over the last decade. Comparing the United States stock of gold in 1914 and 1929 with the amounts of loans, discounts and investments by banks, he shows that for every dollar of net addition to the country’s gold stock there was 15.49 dollars of additional bank credit. He submits that the use of gold reserves in 36 countries of the world, showing that stocks have nearly double*] since 1912. the increase in 11 European countries having been 149 per cent., and in the two Americas, 13G per eent. As to the former, ho observes that there, has been no such increase in the physical volume of trade of the loading European countries, or even in the value of their trade reckoned at the higher money valuations of the post war years. One important factor in the large increase (179 per cent.' in the United Spates has been the voluntary aeU-Sn foreign banks. corporations and individuals in choosing New York as a place for the employment of reserve funds.

THE STANDARD OF LIVING A review of the facts and theories of unemployment has been published by bir \\ iliiam Beveridge, who was intimately associated with the original insurance legislation in Britain. i lie volume incorporates the book which he published m 19(19* anti a new section covers the subsequent period. He concludes that one great underlying cause of the peculiar persistence of unemployment in Britain is that a tremendous increase has taken place in real wages since 1912,. without an increase in the standard of production, so that many people are excluded from employment. A population surplus in this sense is peculiarly exposed to the effects of competition from countries where conditions are not similarly uneconomic aid to the effects of foreign tariffs. The approaching decline of populan m is therefore no ground for optimism, except in the unlikely event of British markets remaining the same even when the population is less. The nation cannot therefore escape from the choice between heavy unemployment on the one ham! and either a lower standard of Jiving or a better standard c.f production on the other. The Socialist theory that the standard of living or of ‘‘purchasing power"’ lean be still further increased must either mean inflation, with the corolI lary of another painful period of deflation. or a still greater shrinking in employment. Similarly the theory that relief works have more than a very limited utility is roundly denied. The main problem. he contends, is still soluble by ‘‘following demand through labour market organisation, and waiting for it through insurance. “To these policies,” he adds, “another must now be added - that of adjusting production to standards of living or standards of living to production.” BRITISH OVERSEAS TRADE Ihe relative steadiness of imports of manufactured articles in face of tin* severe contraction in exports of similar classes of goods has been a very significant feature of recent statistics relating to the oversea trade of the I nit cd Kingdom, says the Times Trade Supplement. The result is that the excess of exports over imports of this class of article has been reduced very appreciably to only 37 per cent., as against 48 per cent, for the first eight months of J 929. There is little doubt that in pre-war years the position was very different; in fact, there would appear to have been a fairly constant margin then of well over 100 per cent, in favour of exports of British manufacturers. I a complete contrast with earlier periods, the value of importco mannfa'-turt s now exceeds that of raw materials. Thus for the fust eight months of this year the value of imported raw materia! an I mainly un manufactured goods for the use of I’.iitish industry was £ 15(1.(•<)(>,<iun. while the net value of imported articles, wholly or mainly manufactured, was £193.000.00(1. There is no doubt that this reversal of the positions occupied by raw material am] manufactures in the import trade of the country is a comparatively recent development and [one of much significance. The complaet'nt view that the disproportionale decline in the value of imports of raw materials is due to the fall in prices, which has been relatively greater in that group than in manufactured goods can hardly be maintained in face of the accumulating evidence of the severity of foreign competition in the British market; for the same reason it is improbable that a relatively larger quantity c.f semi lini-hed manufactures is being imported. The figures which have been quoted seem tn illustrate very clrnrlv the adverse currents of trade against which manufacturers have been contending. DISCREDITED “REMEDIES” “To read the arguments adduced and the phrases used in support of proposals fur inflation, and of making low prices seem high prices, is like reading the history of a hundred years ago,” the Sydney Morning Herald (diserved recently. ‘‘Great Britain then was facing the same difficulties as Australia is facing to-day. A time, of depression had succeeded the short-lived prosperity following the close of the Napoleonic Wars. The gold standard was re-established in 1821, and it was blamed for the low price of wheat, resulting in an agitation to raise prices by debasing the currency. Ami two years later, with currency again suffering the blame, it was proposed to remedy the position by revising contracts made during the period of the debased currency prior to 1821. To call it revision of contracts would have been too apparent, so the wellrounded phrase ‘equitable adjustment of contracts’ was used. And, if we delve further into the economic annals of the I'inetceenth century, as related by William Smart, sometime Adam Smith professor of political rr-onomv in the University of Glasgow, we find Cobbctt, amid rapturous exclamations from an audience at Norwich, recommending an ‘equitable adjustment with regard to the Public. Debt.’ Stanhope in the House of Lords advocating the cutting down of interest on the State debt, and in the House of Commons Hie Marquis of Titchfield demanding ‘simple justice for the aristocracy of the country, who would inevitably be ruined . . . because when money was abundant and prices high they borrowed fearlessly.’ He. too. wanted the ‘equitable adjustment of coTitrnr-ts. ? Our distress and depression is not something now in the world. D is merely now to the present generation. and Iho remedies which Labour politicians of the present generation propose, ‘release of credit’ and ‘compensatory exchange. ’ have their ’•arnllek in the proposals which wore discredited and rejected a hundred