A.—s;

Ample further documents, bringing the record up to August, 1938, confirm the same general trend. The Secretary-General's "Note on the Economic Situation" (September, 1938) thus opens with the words, " In the course of the past twelve months economic conditions m the world at large have undergone a drastic and disquieting .® x Pf eSSed m , figUres (with a base 1929 = 10 °). comparing the second quarter o .938 with the second quarter of 1937, it is shown that industrial production, excluding the Union of Soviet Socialist Republics, fell 19 points, the quantum of international trade ten J.& points, and stocks of primary commodities increased by 23 per cent. I cite almost at random some further passages from the same note:— u Unemployment has shown an increase in most countries." _ Vigorous efforts have been made through governmental measures and private restriction schemes to curtail the output of primary commodities " ''The decline in industrial activity which ensued in the United States'in the last five months of 1937 was exceptionally rapid. The fall was both steeper and deeper than m 1920-21 or 1929-30 ..." "It was in the textile industry—a typical export industry—that the slump made ,? tse 111 the United Kingdom. Between the second quarter of .37 and the second quarter of 1938, industrial activity in general fell off by per cent.; textile-production alone, however, showed a drop of 21-3 per depression 0 IS £ C ° tton industr y has fallen back into a state of acute There was a drop of 46 per cent, in the domestic consumption of steel and iron from December, 1937, to June, 1938 ..." In Germany, signs of strain have become apparent: . . . exports have a en; • • • labour has been made liable to conscription for State requirements; . _ . . a serious decline in security values has taken place on the stock exchange m recent months ..." ■t n val ?e °| ! exports from nearly all primary-producing countries has fallen off considerably, while the value of imports into these countries has fallen less or has continued to rise ..." To take four examples from a schedule of twenty agricultural-exporting countries' trade comparisons between the first half of 1937 and the first half of 1938, the percentage decline m export values is shown to be 51 per cent, from Argentine, 11 per cent, from Australia, 21 per cent, from Canada, 12 per cent, from New Zealand; while for the same periods and same countries the imports were 12 per cent, higher to Argentine, 23 per Zealand 6r Allstralia > 12 P er cent, lower to Canada, and 5 per cent, higher to New 1-htt, C if arly relat< r dto the foregoing is then made: "The recent tendency to currents of ° nS ° nCe agam is clearly traceable to these changes in the Finally, m more general but not less impressive terms, we have: "All the evidence has 8 lefT-nn ! T J a l the se s ack which has taken place is one of major dimensions, and has left no part of the world economy undisturbed. . . . There is the uncertainty regarding the mutual exchange value of the world's currencies. . . . More serious still there is the paralysing uncertainty of the international political outlook. 3 1 a i' ea +- outside America, the manufacture of armaments absorbs a growing to S P™ ductlve resources. And, of course, the authors of the note take care insist that the apparent economic gams from armaments-production are illusory „ Th 6 P° r } ra y ed these passages is indeed a sombre one, yet Ido not suppose it differs substantially from that which already is in the minds of those who watch realistically and themselves are actively concerned with current economic and social conditions and portents. But-and this is surely the most important Sue for all of us—do these disquieting facts give the signal for passive acquiescence and despair or T the contrary, point to the need for positive constructive action with Governments frankly and fully accepting new and extended The answer, no doubt-and this is not the place to discuss its many-sided implications-will depend on one's "general point of view." To summarize, however, what is faMy to be described as a consensus of responsible opinion, as reflected in the altogether moderate and impartial note by the Secretary-General from which the foregoing quotatiZ have been taken, one may cite the following extract from the same document (the context is began n S° C ° ntraStS between " the P res ent situation and the depression which "There has been an important change in the attitude of Governments and pub ic opinion towards the general phenomenon of economic fluctuations There on tbe W i g nrp to a ? ep f ssion run its eo ™ There is greater readiness on the part of Governments to intervene actively by monetary or budgetary policy, public works, and other measures to restore production and employment when a decline has taken place." wmtsui

2—A. 5.

9