The Hokitika Guardian SATURDAY, FEBRUARY 21. 1923 THE WEEK.

Hokitika Guardian, 24 February 1923, Page 2

The Hokitika Guardian SATURDAY, FEBRUARY 21. 1923 THE WEEK.

I.NTKUKsf iii Europe is again drawn to the near boundaries of Russia by the recent trouble between Poland and Lithuania, which promises to develop into another war of a substantial nature unless the stronger Powers unite to prevent the continuance of histilities. Many are unaware that Poland is the third largest nation in .'Europe ill size, sixth largest in population, and is very likely to become one of the first in influence. Poland's history centres largely in her capital city of Warsaw, with its million and a half of people. Its geographical position i* exceptional ; it is the natural emporium for all the fertile plains and alley of Eastern Europe. It stands at a rare vantage point on one of the great rivers of the old world: on every side it opens out to avenues of trade. The famous engineer de I.essejis predicted that Warsaw would become the greatest city on the continent in the twentieth century. Inside the city to-day the national flag is Hying everywhere. It is largely an expression for a reaction. For 150 years it was forbidden to fly that flag anywhere. The Polish flag was proscribed; Warsaw University was Russianised; it was decreed that Russian should be the sole language used in the schools. To he caught reading Polish poetry was a crime to which attached the heaviest of penalties. By many that penalty was paid. One lad of sent teen. sentenced to imprisonment because a Polish epic poem had boon found on bis person, burned himself to death for fear that he would betray his companions under the maddening pain of the Russian knout.

Ti:k Polish constitution is brond-has-ed upon the people's will. For political purposes the republic is divided into fifteen counties. The national assembly consists of two houses, a president and cabinet. Both houses arc elected for five years; together they elect the president for seven years. Every Polish citizen over forty, women included, is eligble for the presidency. Already there are seven women members of Parliament; the I act that a dozen of the members aro Jews suggests that the Poles do not share the anti-Semitic prejudice. There is absolutely equal adult suffrage, save that soldiers and Government officials do not exercise the franchise. The age limit for members of Parliament is twenty-five; one member is elected for every 30,000 of the population. Although the Polos were so long and so completely divided by the surrounding ring of bullies, the hitter experience is now being turned to Poland’s profit. Each party has something distinctive to contribute to the commonwealth. As a consequence the reconstructive development of Poland is acknowledged to l>e one of the most striking facts in Europe to-day. The country’s natural resources are amazing, hut under alien tyranny scant encouragement was given for their development. Her coal fields have an estimated reserve of 110 billion tons; the annual yield of her salt is 140 million tons: she is the third forest country in Europe, with 16.000.000 acres of timber land. Her oil fields are among the richest in the world, despite the fact that tile Russians. before they quitted the country sM 300 of the greatest wells afire. Witii umh resource’ jindci* the foilin']

of Her democratic progressive people Poland may well cherish high hopes ( concerning her future. These hopes every freedom-loving man and nation will surely share. For never has a national heritage been more nobly won. And it seems extremely likely that that heritage will now be wisely used.

j Since the vast hulk of the gold pro- ! duced before the war was used for monetary purposes, says the “Statist,” it follows that the metal owed the greater part of its value to its use. not in the arts, but as money—as an international medium of exchange. The journal explains that the suspension of gold currency did not cause a deel menu its value, because the gold standard was retained in America, while other countries hoarded their gold so that America had to absorb only new supplies, and not even the whole of Hie new production, a portion of whiili went into central banks and Treasury vaults. Nevertheless the value of gold, as measured by commodity prices, lias fallen very heavily situs' before the war. Index numbers of wholesale prices showed the United Kingdom price-level at the end of October to be -33 per cent, above the

pre-war lev. The price of field on the same date was 92s 5d per oz ns compared with a pre-war price of &ss. Had the commodity value of gold been maintained the quotation would have Ireen 130 s instead of 92s dd. It appears. therefore that the real value of the metal on the latter date was 29 per rent below its pre-war value, and it has since depreciated further. Tu considering the future movement in the value of gold it may l>o assumed that a universal gold standard will sooner or later he restored, hut under the gold regime of the future, as the people have learned to do without gold coins and became thoroughly accustomed to paper money as currency, it. is probable that in the future there will be few gold coins put into circulation, all the stocks or the metal remaining concentrated in the central hanks for use chiefly for export purposes as an exchange operation. To addition to this fact it must be remembered that most count t ics have augmented their central gold reserves since the eommcueenr m of the war. Tt would appear, therefore, that gold will remain permanently below its pre-war value. The whol" question is of great importance to the gold-min-ing industry, as well as in connection with the world’s currency problem.

A number of spectacular movements have occurred in the foreign exchanges the outstanding feature being a rise in the American rate for sterling (says the London “Times”). The rise was due in part to exceptional operations of a financial character, and not to ordinary commercial business. Tt is not true, as reported in New York, that the British Government has been carrying out some private borrowing arrangement in New York, or that flic re has been any manipulation on this side. The movement has originated in the main in America. The raising of foreign loans in the United States lias been on a very considerable scale. A substantial proportion of these (innneinl operations lias been remitted, directly or indirectly to Europe. and this lias created a considerable demand for sterling in New York over and above what is required for the settlement of ordinary commercial transactions. No doubt speculation has played an important part in tin l rise, but it must be remembered that one result of the heavy currency depreciation on the Continent lias been to cause lhe conversion of considerable European funds into dollars. Now that sterling i- rising, and is within measurable distance of gold parity, there is a natural desire to convert dollars into pounds, especially as the operation will yield a profit sooner or later. Tt is not improbable that a reaction in the rate will ensue, especially in view of the large amounts that will have to bo remitted to America in 1923 in payment of interest on the British debt. The steady advance in sterling in 1922, however, is chiefly the outcome ■of the fall in the commodity value of gold. Europe has virtually demonetized gold, vast supplies of which arc now oonoccntrated in America. The falling off in Ihe demand has naturally lowered its price, while the concentration of gold in the United States has expanded the credit structure there and raised prices. The rise in American prices has not been accompanied by a rise of corresponding extent in British prices. Hence the purchasing power of the pound has increased. and the pound is worth more in comparison with the dollar. This is the main cause of the advance in the pound.

Mrcn practical experience from t!io war period is now available for the enlightenment of discussion on the socialist project of nationalisation of production and distribution. An interestin'.'' contribution to the subject was made in a lecture to the Bradford Textile Society by Sir Arthur Goldfinch. Director-General of Haw Materials during the war. As head for four years of the raw materials department, which sold nearly £SOO million worth of materials, Sir Arthur is m a unique position to assess the benefits ami disadvantages of State control. State control of industry in normal times has usually taken the shape of bureaucratic regulation. But the system adopted in the war was not bureaucratic control in the ordinary sense of the term. In the abnormal conditions prevailing and under the stimulus of patriotic motives, the State was able to command the services in a large number of eases voluntary, of the best brains trained under the competitive system. Tn fact the system adopted during the war owed what success it achieved, on the one hand, to the fact ' "t patriotic motives to a large extent supplanted those of private gain, and on the other, to an almost universal standardisation of demand, whereas in normal times there is an immense diversified demand spread over innumerable industries at home and abroad. The direction of the resources of the country from 'Whitehall would be impossible except under the most rigid system of dictatorship to the public as to its ta-tes in food, drink, clothing and what not. to which it would certainly not submit except in a time of national crisis. There is also the further point that in war time it was

possible for the various departments | of control to dictate to the foreigner ■ what he should buy from ns. In peace time foreign countries have n choice j of markets which no amount of State regulation in one particular country can control. The conclusion reached by Sir Arthur Goldfinch is that the success of State control in wartime ‘‘offers no encouragement whatever to the ronew'nl of such ventures in peace time." I