WELLINGTON NEWS

Hokitika Guardian, 31 July 1931, Page 7

WELLINGTON NEWS

EFFECTS OF MORATORIUM.(SDecial Correspondent). WELT/iECION, July 29. It was in June that Pres ale lit. Hoover launch.d his moriworium on a world of practically plac-d economics, and a mondi has gone by before there has been in any way a result. It is doubtful if any real result has been achieved beyond enabling Germany to postpone payment of reparations. We know that £20,000,000 was advanced to 'Germany by the Central Tank of Europe for a period of three weeks, when it j was eventually decided to extend the period of the loan for three months. The International Bank has been asked to set up a committee to enquire into further credit needs of Germany, and another committee was appointed to help Germany in respect to banking. That appears to be about the sum total of the good results of the Seven-Power ■Conference in LondonThe views of other countries are varied. France credits its Prime Minister, ■M, Laval, “with having secured a diplomatic victory Over Mr Philip SnowdeH, as he kept France clear of any discussions on disarmament and the Young Plan revision. In Germany there is disappointment because Germany failed to obtain a long term loan, which is really what she requires, and this was suggested at outset by France. There is no great hilation in Britain respecting the ■Conference results. The U.S. Secretary of State, Mr 11. L. Stimson, as was to lie expected, is confident that the measures recommended would allay th' panic, which had affected the German financial position. In the meanwhile the Bremen Bcamtei. Bank had closed on the ground that it could not realise, its securities quickly enough to meet calls. It would perhaps be unfair to say that little good has resulted from the launching of the moratorium. The fact that German and French Ministers met in Paris in friendly and intimate conversation is a decided gain and a valuable precedent. ■Another good result is the fact that the United States Secretary of State, Mr H. IL. Stimson, the United States Treasurer, Mr A. Mellon, and the ■United States Ambassador in France, Mr Edge, took an active part in the conference, and this is an extremely valuable precedent, for the. United States has hitherto strenously opposed taking part in any European conference. America must abandon the policy of “splendid jsloation” and realise that she is a nation among nations and that sh" cannot remain apart from her neighbours. These are the invisible gains of the Seven-Power Conference, When we come to examine the material gains there are Ho gains to record. ni> the contrary, the moratorium cl.stm’bcd the economic conditions. Soon after the moratorium was proposed the Central Bank of Europe commenced mobilising their gold reserves, and there followed a raid on the gold holding of the Bank of England, and in the course of a week over £15,000,000 was withdrawn from the great London Bank, nrnl £5,000,000 was withdrawn in on ■ day, and the whole of the metal vent to the continent. The' Bank of England was compelled’, in self defence, to raise the discount rate by 1 per cent, from 2.) per cent, to 3 per cent, thus throwing Europe back to,,the- position it was in about 15 months ago. Furthermore, the scramble for gold has again affected the price of commodities, and even our butter and cheese dropped in prices. All the metals declined and so did the raw materials. It will take considerable time for recovery, for confidence is a plant of slow growth. The German financial collapse and the events that have followed have again struck a blow at confidence. Ill 1 moratorium merely postpones the payment of war debts for twelve months. At the end of that time payment has to be resumed, and this year’s unpaid amount has to be paid in ten yearly instalments. This is the proposal as it stands at present, but a great deal of water will flow under the bridge before the year ends. The War debts must be reviewed, and what is more they must be cancelled or greatly reduced. At the moment the -American people are politically not ripe' to consider the mat'd', but the abandonment of the “Splnuld isolation” policy is 'the first step in the education of the American proletariat.