THE WORLD-WIDE CRISIS.

Franklin Times, Volume 9, Issue 606, 8 February 1921, Page 3

THE WORLD-WIDE CRISIS.

AN AUSTRALIAN’S READING OF THE PORTENTS

Mr W. S. Robinson, who has had long and intimate experience in commercial affairs in Victoria, and who during the war rendered valuable services in England while acting in an advisory capac-! ity in regard to the control of metals takes a serious though by no means pessimistic view of the existing financial and commercial situation in the world’s chief business centres, says the Age. “The difficulties we are confronted with today,” he says, “are world-wide and < very grave, but they are not insurmountable. They cannot be surmounted until each and every one of the comipunity recognises that, notwithstanding artificially created appearances to the contrary, the world as a whole, and the warring nations in particular, is immensely poorer to-day than it was in 1914. Between £50,000,000,000 and £100,000,000,000 has been destroyed since 1914, the money being found partly by painfully large drafts on the saving of the world prior to 1914, and the balance by a lien, likely to be even more acutely felt, on the saving of the future. The period of inflation is at an end, and deflation, which is always more painful and rapid is on us. It has to be faced, and sooner the better.

“The community must also learn as it will be forced to, the difference between lasting wealth the result of effort, and seeming wealth, the produce of the printing press. The difficulties the world is faced with can only be overcome by increased effort and by widening the margin between production and consumption. So far the recognition of the cure has not spread far—the losses of the war in millions of maimed and dead have reduced enormously the productive power of the world and increased the necessity of those who remain to produce more and consume less. Unfortunately the tendency has been to multiply the means and methods of consuming or spending anb to reduce production by the slackening of effort and shortening the hours for applying it. Necessity alone will convince the majority, and that sure test is at hand. Learning the lesson will be painful, but until we learn it we cannot hope for security and prosperity. Those countries which perceive the dangers of the present position and the causes for them and are quick to put into effect the cure, viz., increased work and rigid economy in Government and individual expenditure will recover, and recover relatively quickly. Those who do not will quickly strike serious disaster. Fortunately in Australia, where nature supplements human efforts to a greater extent than in most other countries of the world, we are better placed to meet the effect of world-wide depression than most of our competitors, and subject to great prudence and increased effort we should safely weather the storm.

“The depression and acute shortage of capital which has been spreading throughout the world since June last is clearly reflected in the severe drop in the price of commodities, which in many cases are now much below the cost of production. This condition of affairs cannot last, for if it did all would inevitably drift into insolvency. A readjustment must come shortly, but it would be unwise to expect it to come solely, or even largely, from a recovery in prices. The movement required to re-establish sound conditions is a material reduction in costs, whieh is the natural sequence of greater 'effort on the part of the community, and until it occurs confidence in the future will be misplaced. “I believe Europe is learning rapidly what is required to right the position, and that is but natural for she was first to experience the difficulties we are all now faced witn. These are grave times, therefore, but I am confident that with the European spring we will see the commencement of improvement, and in the course of time that will be reflected in recovering European exchanges, which will bring wider and safer markets for our productions, though prices may be vastly different to the experiences of the last few years.”