FIRST NEED FOR RECOVERY

Wanganui Chronicle, Volume 79, Issue 199, 26 August 1935, Page 11

FIRST NEED FOR RECOVERY

SIR ALAN ANDERSON’S BELIEF MENDING BROKEN CIRCLE OF EXCHANGE. LONDON, July 20. Speaking at the Royal Empire Society’s summer school at Rhodes House, Oxford, Sir Alan Anderson asked.“By what charm were we able to spread out overseas, to lend money abroad, to develop new countries, to buy and sell freely, enrich ourselves and our neighbours, creditor and debtor, both satisfied and prospering? Why cannot we follow the same polivy of progress now? What has broken the charm? “I suggest,” he said, “that, wc as a great creditor nation before the war completed the circle of exchange and made the whole progress possible by buying and consuming freely the goods in which alone our debtors could repay us. We never stated or asked* other nations to agree on the fundamental principle of world trade, but wo acted upon them and the charm worked. Since the war the position of greatest and ultimate creditor of the world has shifted atross the Atlantic, and the great republic of the United .States suddenly ceased to be a young debtor country and became the chief creditor nation. The change came too quickly to be explained and understood by the 120,000,000 inhabitants of that country. The United States had built up its prosperity while it was a debtor under a system of rising tariffis and has not yet realised or accepted the responsibility of the creditor to maintain the market by buying. “There are, of course, other disturbances which must share in the blame, but let us at all events correct one* major disturbance on which we all agree. We cannot restore prosperity and prices, cannot enable the hungry people all over the world to eat the food which seems now too abundant nor turn the present combination of glut and hunger into plenty and progress until we restore again the broken circle of exchange. The creditor must allow the debtor to pay in goods and services, gold must no longer be treated as a commodity, but must be allowed to serve its proper purpose as a foundation of the world’s currencies and then with commerce stabilising the currencies ami the currencies based on gold wo can resume rapidly the march of progress on which we have still so far to go.”