The Hokitika Guardian SATURDAY,SEPTEMBER 2nd., 1922 THE WEEK.

Hokitika Guardian, 2 September 1922, Page 2

The Hokitika Guardian SATURDAY,SEPTEMBER 2nd., 1922 THE WEEK.

PAHMAMUNT is dragging along iti a very useless but certainly expensive way this session. From the outset the Government was frank enough to sky there Would he very little legislation and both the Speech and tlib Statement bore this old, for nothing new iii the way of policy measures was propounded. The Budget which was brought down last Tuesday fortnight is still before the House and once again the “Loids” have had to adjourn because there was no business to transact. If to the dailyloss on the railways be addod the daily cost of Parliament, Mr Massey will lie able to put his finger on a very substantial leakage. Members of Parliament were ever prone to make use of Hansard very liberally on the eve of an election, but there does not seem to lie any- purposeful advantage ill this, for Hansard is not as widely read as it mice was, and certainly not as widely circulated. Apparently tile discussion on the Ihidget will not bii lii slny way conclusive. A no-confidence motion, alter the trial of strength on two occasions during the address-in-reply i, a palpable waste of time, for at this stage the Government is strong enough to resist any overt attack by any possible combination of the parties ill opposition, It would lie much better, having spoken their part on the muddle of the finance, if the Budget tver-o got out of the way to make room for something more practical in the way of work to lie done. The Estimates have still to be discussed in detail, which presumably will take some time, so that there will he more lost time still before Parliament may settle down to business. But as far as the programme call he guaged at present the present month should afford ample time for the completion of the business ahead—if there is be any sincerity about t-lie work.

Tin: Press Association did Hot spare much lime for the Leader of the Oppo. sit ion wiieii he spoke this week at Dunedin. Perhaps Mr TVilford said iittle that was new, though lie appeared to get home with some home truths. In former times when the Jnhernls were qualifying for the seats of the mighty they had to fight also a hostile press. The press of New Zealand in the aggregate favours the Conservatives, and tlq. late Air Seddon recognised that from the outset. He countered the conspiracy of newspaper silence by taking the platform and meeting the people face to face, delivered his message. In that way he won public opinion over to liis side, and the press had to give the meetings fuller publicity. Air AAilford seems to realise the occasion for like action. The meeting held at Dunedin this week was the opening episode of the Liberal campaign. The Leader of the Opposition proposes to stump the country, and where he cannot go members of his party will appeal. They are to speak in couples each with their own subjects, and in that way much ground will be covered. At Dunedin Afr AYilford did not go the length of disclosing his policy. That seems to be rather a mistake. The present fs <• very- opportune time to impress tlio minds of the jieople. The Government has made it plain it is barren of ideas for a new policy and even though Reform may threaten to borrow some of the Liberal thunder it can he but a re-echo of the first blast, for tllero is nothing like being first in the field. The peoples’ minds at this juncture will be more impressionable than they will be in a couple of months time when polities will he re-echoing all over the Dominion. It has been suggested Air AYilford will break new ground at Christchurch next week. If so it will lie well timed and in a, centre which has been more defil'dtely Liberal than any other portion of the Dominion—the West Const excepted.

Tim Hon. G. A\\ llussell, one of our most sanely constructed politicians, has during the week, offered bis opinions on tile methods which might be employed for the economic reconstruction of the Dominion. It is well that thoughts should be directed along such lines at the present time, for the Government is devoid of all constructive ability to retrieve our damaged fortunes. Air Russell purposes to work along Liberal lines which were so helpful ill the past—cheap money, laiiu for: settlement, industrial expansion. He proposes to provide cheap money by borrowing on the London market straight out for the purpose. If that task can be accomplished at a reasonable rate of interest, and tl'ie money is fairly allocated over sound investments the action will be for the benefit of the country, both directly and indirectly. Directly because the cheap money will I>p, most qepeptfiblp for develop*

met purposes and indirectly because the effect will be to reduce interest rates generally and so bring more money more quickly .into cirenilation. Land for settlement is required if the country is going to go the right way about accommodating the additional population

being brought into the Dominion. There is an urgent need for more, population, and to secure the right class, land is required for settlement to ehnhlO tlit'in to become producers.. As to expansion of industries, there is room for this, and assistance can lie render-

ed by reducing taxation. Probably a system could be arrived at by regulating what the country takes in lesser proportion to the development each company makes in its expansion either in cmpiovment or improved means for production. Mr Russell certainly suggestK a liiu? of thought nkDg which a gobd deal could he done to the position of New Zealand if the advisory statesmen had courage and confidence in their task and adopted a forward movement on the lines suggested by the ex-M inis ter of the National Government. I

Tin: position in regard to German finance was viewed at Home with some alarm in financial circles over two months ago. A London financial paper issued ertrly irt July Commented in the following strain: For some time past a severe depreciation of the German mark has taken place as the date approached for milking a piiym@ni oh ' of Omit of reparations. Hitherto part, at least, of tiie fall has beet! recovered subsequently. Another (reparation • instalment will be payable on July To, and the financial crisis lit Germany prior to the payment appears tb have . been more severe thail those which preceded it, Indeed, it is reported, that after tins operation Germany will he nimble to itlnke further payments, and will ask for it ifiofntariiihi, whilst it is understood that the situation is be l iiicj carefully considered by the Britisii Cabinet. The crisis was attended by a. rise in the German exchange rate to the highest figure yet reached, for I at one time 2,470 marks were requir- j ed to produce a pound sterling, which j meant that the mark, normally worth nearly Is, reached a value of less than I one-tenth of a penny. This fresh fall had a demoralizing effect upon. the , principal other European currencies, especially the French franc, for it is considered that n bankrupt Germany would react unfavourably upon France. With the Paris Bourse upset by the latest development in the Emppeatl financial sit uation, London luis ttlsb been disturbed and the recent weakness in Stock Alarkets is to he attributed largely to the demoritiiiatioil Of the foreign exchanges. Fortunately. Sterling hi New York lias not fallen in value as have ino-t of the European currencies, and this perhaps, is one of the most reassuring features of ail unsatisfactory situation.

This further fall in tile German mark, continues the London paper, would seem to oMI for a fresh examination of the whole question of German reparation payments, chiefly for the purpose of ascertaining, if this is possible, whether the present attitude of that country is duo to unwillingness or inability to meet the demands of the Allies. It is the opinion of some eminent economists that the terms exacted wore too severe: that it was impossible for Germany to comply with them; and that oveii if she had been'able to do so the effect upon the economic situation „f other countries would have been bad. This may lie granted, but it is also true that Germany lias pursued a policy the inevitable effect of which lias been to depreciate tile mark, and thus increase the difficulty of meeting reparation payments. Germany has subsidised industries in order to keep down the cost of living in the country, and without an iulcNjiiutc* system of tsixutioii tlic expense to the State involved' in such a policy has only been possible by constantly increasing the volume of currency, with the result that the latest return of the Reiclisbank showed a note circulation of nearly HO milliard marks against less than 75} milliard marks at about this time last year. Continuous printing of notes has also lieen adopted in order to sell huge amounts of marks to foreign countries for the purpose of obtaining means with which to buy raw materials, and in part to meet reparation payments. It almost scented as though Germany was quite iiidifTeicnt to the steady depreciation of tlio mark which this policy brought about so long as it enabled lier to purchase abroad t. <■ commodities absolutely necessary to her industries. No one could bo blamed, therefore, for taking the view that Germany deliberately brought about the depreciation of her currency. Recent developments prove that the industrial prosperity which Germany enjoyed lor a time as a result of the difference between the internal and external value of the mark was artificial, and could not last when the depreciation in the mark at home approximated to that abroad, and Germany was compelled to buy raw materials heavily from foreign countries.

Antoros of tlio effect on British national finance and particularly in regard • to Great Britain’s huge war debt to ■ America, there are some interesting rej marks indicating John Bull was brave--1 ]y shouldering the burden for the Al. i lies oil whose behalf the money was originally raised in America. Since then strike developments in the United States have been very helpful to Great Britain, and instead of gold—a very scarce commodity and more useful in the Bank of England than else—Britain is sending over vast quantities of coal to provide for the industrial plants of the United States. The payment for this coal will have to ho made, and the money will be • both useful and exceedingly timely as a relief from sending gold out of the country. However, the financial jouri nal comments as follows: —lt is just | possible that tlie fresli crisis which has i arisen in connection with German re. j partition payments may be a prelude to ! a serious consideration of the whole ■ question of international war indebtedness. If France cannot look to Germany for compensation she will be most reluctant to resume interest payments on the money owing tfTus and a similar position will be reached in other directions, so that the progress towards econmic recovery will bo retarded. It js pot likely tbnj: WR rdtnTJ pppuq

Trance even supposing such action would have any effiect ■ but whatever may happen in Europe this country will continue'to meet its obligations abroad. In his Budget speech the Chancellor of the Exchequer indicated, what was already known, that during this year we should resume the payment of interest

on our debt to America. The operation) it is believed has already commenced by shipping gold to the States. Last week’s Bank Return■ showed a reduction of about £500,000 in the coin a nd

bullion, an item that lias not changed j to more than a trifling extent for a long time past. The movement was in face of a transfer of £500,000 of tlio gold reserve held in the Currency Note Department against a transfer from the Bank of England of a like amount of Bank notes. It followed, therefore, that in all the Bank of England lost about £1,000,0(10 of gold, and there can he no doubt that this gold was sent to America for the purpose indicated. The amount is only a small proportion

of the total for uTiich we are liable this year for interest, but it is likely that America will be impressed by the intention thus indicated of meeting our obligations at any cost. The circumstance may induce America to ask for a fresh conference at which these matters can i)0 thoroughly discussed. While we are prepared, as stated, to meet our obligations, it would be more satisfactory if our indelitedhess to Am. erica could be funded into a long-dated loan, by which the nibolilit itH : Which ve are liable could be spread over a longer period)