First Year of Recovery World Affairs in 1934 survey of Fiscal Progress

Waikato Times, Volume 116, Issue 19463, 31 December 1934, Page 3

First Year of Recovery World Affairs in 1934 survey of Fiscal Progress

WITH A RESOLUTION somewhat akin to that born of despair the world entered upon 1934, which was to produce many striking evidences of change in national and international affairs. The political features of the year were characteristic of the prevailing state of insecurity, and their effect must be taken into consideration when reviewing the economic progress during the twelve months. The failure, and virtual collapse, of the World Economic Conference in 1933 left the countries of the world without any sheet anchor. Great hopes had been placed in the Conference, and the abrupt declaration by the American President, which was priuiaiily responsible for its breaking up, shattered any hope of an AngloAmerican compact for economic co-operation. The immediate upshot was that individual countries embraced more closely than ever the doctrine of economic nationalism and self-sufficiency. Such was the state of affairs when the year opened. On the surface there appears to have been little change in the attitude of nations. There are, however, features which point to a gradual improvement in material conditions, and which lead to the inference that internationalism will replace selfish nationalism before long. The volume of world trade has increased, although there has not been the same rise in its value, owing to continued depressed prices in many of the great consuming countries. Restriction of imports continued to provide an almost insuperable barrier to international trade. This was felt most keenly in the ease of Germany, .which since the war, had been a good customer of the producing countries. Her difficulties with regard to exchange manipulations and foreign debt services caused pro-

found effects in countries which had depended on her purchases of raw materials to effect complete clearances. In consequence the revival in the wool market, for instance, received a severe setback, and although prices are still ahead of those of the slump years, the excellent promise of last season has not been fulfilled. On the other hand the high price of gold had a most stimulating effect upon at least one country —South Africa. Rot only was the Union able a few months ago to make a complete discharge of her outstanding war indebtedness to Great Britain, but her export trade flourished and she is enjoying a state of remarkable prosperity. The goldfields of the Rand were invested with new life. Deposits which, under the old prices, could not have been profitably worked, now proved to be payable propositions, and the Avealth of the Union was inei'eased. A noteAvorthy feature of 1934 was the contrast in the methods of recovery employed in the tAvo great manufacturing and consuming pountries, Britain and the United States.. In the former the seeds of prosperity had been sown by a policy of rigid economy Avbich soon bore fruit in ari expansion of industry Avhich was further accelerated by a subsequent felease of government funds for necessary expenditure. The United States adopted a policy of, regimentation of industry coupled by lavish initial expenditure of state-created credit. The results have not been easy to judge, but they have not been generally satisfactory. The necessity for economy was not fully realised, and the attempt to eliminate an apparently essential phase of tlie recovery appears to have complicated the position. The effect is that Britain is in the vanguard of recovery, other nations folloAving in proportion to the extent to Avhich they have adopted British methods.