WELLINGTON NEWS

Hokitika Guardian, 22 June 1931, Page 2

WELLINGTON NEWS

< ■ 'BLAME THE WAR, (Special Correspondent). WELLINGTON. June 18. The Great War is blamed for a good many .things that should be debited to politicians, for it is .the maladministration of the affairs of the world by legislatures that has banded the whole civilised world in a slough of despair. President Hoover in addressing a Republican Association said that “The main causes of the extreme violence and long continuance of this depression came, not from within, but outside of 'United States.” This may be a source of consolation to the people of America, and is just the kind of a statement that a politician seeking a renewal of office would make, but it does not happen to be true. At all events, there is abundance of evidence to prove otherwise. Up to October 1929, there were no outward indications of an approaching slump. America was indulging in an orgy of speculation which, about the middle of 1929, began to impress the ivorld. Stocks went soaring on the (New York Exchange and brokers loans Roared also. The latter could not be checked by high rates of interest for ipall money and it was not until Bank Yates in New York and London ascended that the bubble burst. This was the ’beginning of the slump. The United States, which, prior to that, was playing the part of a creditor nation, suddenly found it necessary to curia!) credits and call in whatever temporary funds, that were domiciled in Europe, The world would have easily adjusted itself ‘.‘to this, but just then the Hoover Administration considered that the country needed further protection and under the Hawley-Smoot tariff, the tariff wall was raised very much higher; high enough [to keep out most foreign goods. America, as a creditor nation, expects her debtors-to pay and to pay in dol•’lars, except bv the sale of goods for dollars, and that has been made' ex{tremelv difficult. The war debts come, | into the picture. About sixteen foreign ; Governments are indebted to the United :■ States Government and debts between .5 Governments mav almost h* said to be l sacred. Interest and amortisation must j be .paid promptly on due date. i Thus it hapnens .that, whatever the 1 nations are able to sell to the United j -States, the dollar proceeds must first I be applied to the payment of war debts, ■ and whatever balance remains becomes I available for buying American manufactures. But the balance is very small because it takes the nations, all their time to collect sufficient dollars to meet ■ the service of the war debts because of the prohibitive tariff • hence America’s export trade has contracted enormously. t Now, it must be remembered that Ameri- | can factories are organised for mass l production, that is, to supply the domestic and to have in addition ;* ample stocks for export. < “ Immediately following the war, the 5 United States was the only country that could maintain an export trade for the rest of the world, and Europe in partij. cular was exhausted, and America had j worked up a good export trade, having i captured many of the markets that had j be;n supplied previously by Britain and | other European countries. America jj might have retained a good deal of the ! export trade she had captured,-but her j politicians must insist upon raising the j tariff. Reprisals followed and the exj port trade- of America contracted. Mass J production had to be curtailed and •1 factory output was equal only to a fraction of capacity; Curtailed factory output-involved curtailed staffs, .resulting in smaller turnover, smaller profits and lower dividends, and so the vicious circle has been maintained. The- world will' not fully extricate itself from the tentacles of the depression uhtil the tariff war is over, and the initiative in, ending the war rests with the United States. Bankers --and business men in America think very differently from President'..Hoover.