The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, SEPTEMBER 2, 1931. A QUESTION OF CAUSES.

Hokitika Guardian, 2 September 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, SEPTEMBER 2, 1931. A QUESTION OF CAUSES.

Not since the world depression deepened in 1930 did the clouds of the economic storm now sweeping over Europe lower so ominously ns during the past few months. The chief outward symbol of a critical situation' wag unquestionably the development of the financial crisis in Germany in July, nut it would be idle to deny that many other countries of Europe have been experiencing exceedingly difficult times. Contrary lo what may be regarded as a popular view of the matter, the complexities, of the time are not entirely due to economic causes. In the past two or three months no new economic influences have been teit. Rather is it a e.a'se of the strain beginning to tell. The long-drawn-out and severe fall in commodity prices, the ■restriction of trade, and the withholding of further supplies of foreign capital from countries which have reiied largely on borrowed funds, represent a combination of factors which could only be expected .to react ««- favourably on botb the national and international position in Europe. Inasmuch as they were inherent in the situation they could not be avoided, comments a southern writer, but there can be no doubt that no small proportion of the problems that have been confronting European statesmen • are political rather than economic in their origin. The maladies attendant on acute depression have received special

impetus as a result of political conditions, and an epidemic of troubles that might otherwise have been escaped has been the outcome. In respect o-f Germany, this is notably the case. The position in which Germany found herself at the close of the war demanded drastic remedial measures, too many of which were not adopted. A new regime was established with all its political uncertainties and difficulties, and the leaders of the new Germany, confronted by the need for a complete reorganisation of the industrial, social and economic life of the nation, which had been shattered by the unsuccessful issue of the war, addressed themselves to a task o,f the most formidable dimensions. The heavy

burden of reparations and the disruption of production made it impossible for the republican Government to balance, its.: budget an 4 it had recourse to currency inflation. “The rapid depreciation of the old mark and its eventual disappearance are a familiar story,” says the Guaranty Survey of New York. “What is not generally realised, apparently, is the extent to which the inflation and repudiation of the old currency have contributed to the more recent difficulties of/the Reich.” This, together with the Unproductive 'use of .credit for social enterprises, none of: them directly, wealth producing in any way, had the effect of imposing fresh tax burdens on .a nation already groaning. under the weight of reparations payments. There , would appear to be substantial ground for the opinion that the profound economic disharmony of the present time, not alone in Europe, but in practically every country of the world, cannot be completely cured by > economic means.