The Hokitika Guardian MONDAY, JANUARY 22nd, 1923. INTER NATIONAL FINANCE.

Hokitika Guardian, 22 January 1923, Page 2

The Hokitika Guardian MONDAY, JANUARY 22nd, 1923. INTER NATIONAL FINANCE.

Before the London Chamber of Commerce Mr F.dgar Crammond. in the course of a recent address, examined the financial position of Great Britain, France, Germany and Italy, and offenul some observations as to the lines on which British financial policy should • w be '•■•op.'.i 0-v oild jpt t’’o

i i period ol intensive economic developmeiit which occurred during tile Id years. 1870-1914. tile world became merged, to nil intents and purposes, into one economic unit. In tliis period there was a roinnrkahle growth of internatiotnil trade and a great increase of wealth in till parts of the world. In August. 1014. the war crashed into this wonderful and delicate credit, machinery and completely ureeked it for the time being. The Treaty of Versailles carried much further the disintegration of the pre-war economic system. Framed as it was til the white heat o( passion created try the terrible losses and sufioring arising out of the war. it was perhaps natural that it should have taken the form "f an intensification ol the spiiit of nationalism. At the beginning of 1 <)22 although Germany and Austria had disarmed, there were as many armed. men in Europe as there were in 1913. Tiie undue emphasis ol the doctrine of self-determination had in its turn given an impulse to the adoption of a. disastrous policy of economic seifdetermination. and in the fourth year of peace we were compelled to recognise that the world was in a very unstable position. Wliat was the remedy'.' He was convinced that it lay ill disarmament and in the breaking down of the harriers which prevented the woild from becoming once again a single .vonome unit. Viter the wni broke out it became ncessary to transform inn production from a peace basis to a war basis with the greatest rapidity. We began with an Expeditionary Force of KSO.OOQ men; at the beginning of 1918 we hud over 3,000.000 men serving oversea. In addition to maintaining and feeding our own troops we were at the same time maintaining 3.000.000 fighting men of our Allies. In order to achieve these results. flic Government found it expedient to adopt nil eonomic policy which uitiinalely increased the numotsiiy ciieulatioii liy 250 per eent.. eommodit\ prices by over 200 per cent, and the wages bil! of the country by about 200 per eent. After tile Armistice it became necessary to transform the production from a war basis to a peace basis. Again there was an urgent demand for our peace production. 'llie urgent post-war demand for our lnaimfactures was satisfied early in 192(4 reached their highest point ill April. 1020. when the Statist index number was 200.1. an increase of 181 points or 213 per cent, in six year*. This was by far the greatest and most iapid upward movement in commodity prices of which there was” any record in our history. In April. 1920, prices begun to full and the fall continued at a tremendous pace, until October 1921, when the low level of 138.1 was reached. A further decline of 10.5 points occurred, bring the index figure down to 127.9. Tiie fall was of unprecedented severity and while it lasted its speed was about twice as rapid as the pace of the rise. At the moment prices appeared to have readied a period of comparative stability on a basis approximately 50 per eent., above the pre-war level. The abnormal fluctuations in wholesale prices naturally exercised a profound offevt upon foreign trade returns. Imt it was reassuring to note how the excess of imports over exports in the war years had been reduced, and that for the current year the excess would be little more than that of 1913. In 1913 our investments abroad were valued at approximately Ct.OOO millions. Owing to the war. the amount of these investment* had been reduced to approximately £3.000 millions. On the other hand the v.nr had brought about a further adverse change in the position of our trade balance in the shape of the interest which we had to pay on our debt to America, say £45 millions per annum. \t the end of 1.914 we owned 18.8 million gross tons of shipping. Our losses due to war casualties were 7.890.000 tons, and the lowest level to which our mercantile marine fell was about 16,000.000 tons in May. 1918. Tn .Tune 1922, the gross tonnage of our shipping was 19,053.000. so that it had been more than restored to its pre-war level. The earnings of our mercantile marine in 1913 amounted to £IOO millions; for the current year he estimated these earnings would he about £9O millions.