The Wanganui Chronicle.. WEDNESDAY, JANUARY 5, 1944. POST-WAR PROBLEMS

Wanganui Chronicle, Volume 88, Issue 3, 5 January 1944, Page 4

The Wanganui Chronicle.. WEDNESDAY, JANUARY 5, 1944. POST-WAR PROBLEMS

'J’HE prospect of victory being achieved during the current year brings with it urgent problems. After the last war there was au inadequate understanding of the post-war problems, but with the experience of 19.19 and after to'guide the nations the post-war problems of 1944 should be more intelligently approached. This should give some ground for the optimistic belief that there will at least be a greater measure of success attained than was the case after the last war.

In order that the mistakes and inadequacies of the last postwar period shall not be repeated, it is desirable that the nature of the actions then taken should be widely known and understood. This task has been undertaken by the League of Nations Secretariat in two brochures entitled “Belief Deliveries and Relief Loans 1919-23” and “Europe’s Overseas Needs 1919-20 and How They Were Met.” The second publication has just arrived in New Zealand and summarises the then position as follows: (2) At the end of the war productive capacity in Continental Europe was at an extremely low level; in 1919 industrial production was about one-half, agriculture one-third, below normal. (2) During the years 1919 and 1820 Continental Europe appears to have imported about 17.5 billion dollars worth of goods from overseas, against an export of only 5 billion dollars. Foodstuffs and finished goods formed an unusually large proportion of these imports; the imports of raw materials were relatively small. Northern and Western Europe received proportionately much larger supplies than Central and Eastern Europe. (3,> The import surplus of about 12.5 billion dollars in the two years mentioned was met from the following main sources: Shipping services (about 1.800.000,OOOdol), emigrants’ remittances (about 1.400.000,OOOdol.), expenditures in Continental Europe of the American and British Armies (about 1,000,000,OOOdol.), yield on foreign securities (about 700,000.000dol.). inter-governmental loans (about 2.800.000.000dol„ of which 900.000,000d01. was relief Joans), liquidation of security portfolios, and, to an amount very roughly estimated at 2,500,000,000d01., from short-term credits. (4) Food was supplied by relief organisations, mainly during the first halt of 1919. Thereafter relief deliveries were on a much reduced scale.

(5) No international plan was evolved for the provision of the war areas with the other goods essential for the restoration of their economic life for nearly two years after the armistice. The ter Metilen Plan, presented to the Brussels Conference in October 1920 for raw material credits came too late and failed to materialise, and the States were forced to acquire raw materials within the limits of their own financial capacities. ((>) The absence of provision for raw material credits was an essential factor in the process of currency depreciation, inflation and hyper-inflation. (7) Inflations ami currency depreciation in their turn caused a violent redistribution of national income and wealth and prepared the ground for social unrest and political agitation. The foregoing picture is comprehensive despite its brevity and makes it clear that the following errors that were then made must be avoided in the future: Leaving the distressed countries to stew in their own juice immediately the post-war relief enthusiasm has died down; confining the supply of goods to countries I hat are to be rehabilitated to food and finished consumption goods; leaving impoverished countries to sell up to keep going in the hope that something will turn up before bankruptcy stares them in the face: leaving the said countries without credits to at once obtain raw materials and foodstuffs for the conduct of their industries and agriculture. Immediate credits for machinery are not enough and a much wider plan for financing flic rehabilitated countries must be comprehended and be ready for almost immediate implementation as the occupied countries are freed from the invaders. New Zealand’s part is that of food provider, but New Zealand, while a prolific producing country, is a debtor community and its financial resources after the war arc not going to be strong. Too much lavish expenditure from 1935 onwards, too much increase in the currency and too little respect for contracts have dragged down ths internal conditions of this Dominion during a period when the economy of the country should have been strengthened. Tlie result was that New Zealand had no financial strength compared with what it should have had to enter the war. This makes :t doubly important to New Zealand that a comprehensive plan for financing international trade shall be fashioned at once in order to avoid the tragic delays that occurred after the last war between the close of hostilities and the full functioning of the world’s industries.