ECONOMIC PROBLEMS

Dominion, Volume 13, Issue 143, 12 March 1920, Page 7

ECONOMIC PROBLEMS

DEFLATION OF CREDIT AND CURRENCY

REDUCTION OF GOVERNMENT

EXPENDITURE

SUPREME COUNCIL'S PROPOSALS

ißy Telegraph-Press Association-Copyright

London, March 9. The Supreme Council's Economic manifesto says it is essential to take early stein to secure the deflation of credit and currency, (a) by a reduction of recurlent Government expenditure to within the limits of revenue, (b) by the imposition of the additional taxation necessary thereto for that purpose, (c) by funding short term obligations by loans si l> scribed out of the savings of the people. Id) bv the immediate limitation and trradual curtailment of note circulation. The provision of raw materials being essential to the restoration of industry, means should be found by which countries at present unable to purchase in the worln markets can obtain coninurdal credits. It would be possible to achieve this when the countries have made il-e reforms previously indicated. The Conference recognises tile necessity hi continued co-operation by the Allies and the removal of obstacles to ;'n easy jnteicl'imge of essential commodities. ■Th't Allies will continue to consult toge'her i:i regard to the provision and distribution of necesary- raw mate'! lis and foodstuffs with a view to the early restoration of normal conditions. Restoration of Devastated Regions. Tho Conference has given careful attention to the case of the devastated regions, especially in Northern France. The restoration of these regions is of primary importance to the re-establish-ment of economic equilibrium in Europe and the. resumption of normal trade.conditions. Evidently the large sums reauired for this work cannot be provided out of current revenue, nor can the work of restoration bo postponed, until reparation from Germany is received. Therefore the Conference has recognised that the capital sums required for this restoration may properly be raised by mav. ket loans in anticipation of the reparation payments provided in the Peaco .treaty, and the restrictions which they, desire to see placed upon new borrowing do not apply to loans or credit to meet this normal capital expenditure. The Conference has agreed that it is desirable, in the interest both of Germany and of her creditors, that tho total amount of reparation, payable by her should be fixed soon, and has agreed to an extension of the period of four mouths from the-signature of the Treaty in which Germany is entitled to make proposals on this matter. The question of allowing Germany to raise a foreign loan will be referred to the Reparations Commission. The declaration on the economic conditions of tho world states that tho Council, after carefully surveying all tho aspects of this vitally urgent problem, is agreed l upon the following recommendations with a view to the amelioration of the present economic difficulties in Enrone. - Restoration of Peace Oonditions. Firstly, it is of paramount importance. that, peace conditions should be completely restored at tho earliest possible moment throughout the world. In order-to achieve this object , it-is desirable: (a) That peaco and normal economic relations should be re-established as soon as possible throughout iiastern Europe; (b) that.armies should everywhere. be reduced- to a peace footing; that armaments should be-limited to the lowest possible figure compatible with national security, and the League- of Nations should he invited to consider as soon as possible proposals to-bring this about; (c) States created or enlarged as a. result of the war should immediately l'e-establish full and friendly co-opera-tioa. and should arrange for an unrestricted interchange- o£ commodities in order that the essential unity- of European, economic life should not be-impair-ed-bv the.erection of artificial: economic, barriers. Resumption of Industry. Secondly, not only tha Government of ea:h country but all producers should immediately attend to the execution of all measures. Contributing to a full resumption of peaceful industry, the encourage-, nient of a. better output by tho worker*, improvement of machinery and. means of. transportation, and the removal of -disturbing features such as profiteering. Thirdly, each Government should immediately consider a means, of, urging upon all, as a. national and vital neces-i sity, the suppressing of extravagance and. tho reduction of expenditure, in order to bridge the gap. which must, exist forborne Years between tho demand for and tho supply of essential commodities.—Aus.N.Z. Cable Assn.