ECONOMIC OUTLOOK REVIEWED

Dominion, Volume 13, Issue 46, 18 November 1919, Page 3

ECONOMIC OUTLOOK REVIEWED

EUROPE'S PLIGHT TO-DAY SOME REMARKABLE FACTS Sir George Paish, for many years edifor of the "Economist," has a most informative article in the "Contemporary Review," 0:1 "Tils! Economic Outlook in Kurope." He (fives eome remarkable facts about the financial conditions today of Great Britain, France, Italy and Germany. Xoto the c-lieerful tone in which he writes of Great Britain's financial strength and credit. "Tim financial strength and credit of Great Britain aro still undiminished," ho says. "Prior to the war the nn* tion's wealth v/.ts calculated at about .£16.000 millions, of which some ,iM()00 bullions consisted of foreign and colonial securities. During tile war Great Britain has lent to her Allies and Dominions iV sum not far short of .£20(10 millions, while, on the other hand, site has sold .a'moderate amount of her previously •held foreign investments, and has borlo'wed abroad about .£ISOO millions. < V/e Own £3000 Millions Abroad, "Placing the new debt agiinst the new invr-stments her foreign investments are nearly, if not quite, as great as they wero prior to the war. At tlio moment the money she has lent to Russia is lost. This amounts \o about .-£OOO millions. She has also lent over millions to France and nearly ,£-KK) millions to Italy, as welt ns nearly .£IOO millions to the Dominions and to minor European PowersEven were the, whole of tho now investments to be disregarded Great Britiin tt'Hild still possess' foreign investm.'/its .of nearly .£IOOO millions against tho loans sh-5 has incurred abroad. A reasonable estimate is that Great Britain now owns foreign investments to the nominal value of over • millions, against which she ou\w about .£ISOO millions ' abroad, -and that after allowing for - the repayment, of her foreign debt and writing off her doubtful investments the net and real valuo of her foreign investments 'is.at, least..£3ooo millions. "In otiier words, on the basis of prewar. valuations, Great Britfjiu still possesses net wealth to the value of at legist ,£15,000 millions. If current lalues of land, houses, and property of all kinds are accepted, Great Britain's wealth is now very much greater than, it was prior to the war.. Not Beyond Our Income. ."Nor. .must it lie supposed that Great Britain is living much beyond her income. It is true that her foreign trade shows a vast excess of imports over exports, tho excess for the first seven months, of tho current, year amounting to .£<o2 millions, or at the rate of =£690 lhillions per annum. But it must not bo forgotten that Great Britain is still receiving, either nominally or actually, a 'great income from her foreign investments, and it must also be noted that idle is deriving a much greater income from shipping than ever before, notwithstanding tho reduction in her effective tonnage, and that when the gross income from her ships (those coming to this country are charging over 7CO per cent, more for the carriage of home-' ward freight than they did prior to tlio war) is added to the net income of her foreign investments and to tlio sums received in payment for tlie services Of her bankers and others rendered to oilier nations, t]io deficiency is found to be very smill, or even non-existent. "Indeed, Great Britain would have little difficulty ifo paying her way wero it not for the hsln she continues to vendcr to the other Entente nations. Tho depreciation of the sovereign in certain countries is entirely due to the fact that Great Britain is granting very largo credits to the Continent, and. therefore, must herself oljfnin credits from America, and other countries.. From tho very beginning of the war until the present day Great Brilain lias paid her way. Tho Disastrous War on France. "Upon the ..well-being of France, the effect of the war lias been exceedingly serious. It has destroyed the value of the greater, part of her pre-war investments, which had been distributed over the surrounding nations, and more particularly in Busiia. It has destroyed a considerable portion of her factories, her mines, and lier farms. Tt has cut oil for the timtf being her great tourist in come, and it has brought about n, eevoro contraction in productive power by reason not only 'of the physical damage to property which can be restored, but of the great loss of and injury in her man-nowcr, which cannot he repaired.. lln this situation she has io reckon with tho fact that.'V Central Powers . are 'in no positio 1 •: make redress or even to provide ' . ' for the work of reparation, exct •••■ iver a long peri iod of years. Jt;. all this Prance his been rompellc :o incur a debt abroad during the far of over 'millions* and is getting deeper into debt day by day. What Francs No;ds. "The remaining wealth of Franco is, however, very considerable, and if it v;ero possible for her to rebuild her factori&3. restart her mines, re-establish her larms. and reopen her ports to tourists, »hu would, in a'very short time, bo abla to pav for all liia produce ami the goods 6lio needs without running further into debt. It is calculated that the food production of Frau'ce_ in tho current year is not much mure'than half of what it was prior to the war, and beyond re-. Quiring to make good this deficit by purchases abroad she requires great quantities of foreign raw material as well as of materials for the rebuilding of her ruined cities, factories, and farms. "If. is of. the very greatest importance, not only to the welfare of France, but to the well-being of the whole world, that tho French people should to supplied with all tho food and material they need in order to regain their prosperity. Unless they can obtain the add.tional orcdit they will want in the coming twelve months their condition will indeed be deplorable. In the first. four months of the current year tlio imports into France wero at tho rate of .C9GO millions a year, while the exports were at the into of only jCJGI' millions per annum, the excess of imports over her exports being, therefore, at the rate of no less than .£793 millions per annum. . . . "But if the condition of Franco and of Italy is deplorable, how much worse is th" situation in Germany and in Austria. A United Loan. "Wliile, ho single nation, not even the United States, is strong enough to supply Europe with all the credit it needs in the noxii twelve mouths, the League of Nations, which would comprise practically the entire world, would possess all the economic and financial strength required; to supply Europe willi additional credit. With the filial restoration of peace and with a!'! nations acting in cooperation. tho security for a League of Nations loan would ba so good that it Would be readily accepted in payment for all the food and all the material for which payment could not bo mndo in kind. Furthermore, the credit which the League of Nations would enjoy would be so grwit that no difficulty whalver would' bo experienced in providing France with all. tlio funds she needs to undertake tho work of restoring her damaged factories, mines, and farms without further delay, and thus enabling her to resume her normal rato of production."