“NEW & BETTER WORLD”

Hokitika Guardian, 15 September 1931, Page 6

“NEW & BETTER WORLD”

RESULT OF THE SLUMP

NATION'S FORCED TO CANCEL WAR DEBTS.

CHRISTCHURCH, September 12

“Out of the present conditions of | apparent discord, turmoil and revolu- j tion wifi emerge a world civilisation that will be far superior to any civilisation of the past. We are experiencing merely the birth pangs of a new and better world civilisation—and it is something to be living in these days.” This declaration was made yesterday by Mr G. Lawn, lecturer in Economics at Canterbury College, during a striking review of world conditions. Mr (Lawn, after -stating that the German situation seemed to be the key to the whole problem of recovery from the world depression, said that if the threats of a revolution in Germany materialised there would be an instant repudiation of war debts. Within the next twelve months he would not be surprised to see the cancellation oi all war debts, a gentle preliminary step towards which had been the Hoover moratorium.

INSECURITY OF GERMANY. Mr Lawn stated that the economic and political insecurity in Germany was retarding the business confidence that was necessary to recovery. According to the Young Plan, Germany was to pay in reparations the sum of £85,000,000 annually, increasing to £120,000,000 annually .in 1956. Those reparations payments went on till 1988 and carried with them certain rights oil the part of creditor nations that amounted practically to some exercise of authority over Germany’s internal affairs. Reparations were to some extent secured from revenue from the railways and Customs, and one of the humiliating features as far as Germany was concerned was this power of creditor nations to question certain changes of political and economic policy which might prejudice the payments. It was not at all likely that the Germans would tolerate what they regarded as a serious ■injustice. Since the restoration of the mark in 1924 there had been a greater inflow of capital into Germany than the amount of the reparations, so that it was only recently that the Government had had to face the task of meeting the reparations out of revenue.

PEOPLE SWINGING TO EXTREMES

•When the financial collapse took place in Austria some time ago it brought about a serious financial crisis in Germany Also, and there was a consequent cessation of the flow of foreign capital into the country and, an outflow of capital from Germany’s moneyed people who, judging from the experience of the past, were afraid of the position. As a result the Government was having to find reparations out of revenue in a time of depression. I his meant that, in order to do so there ■Would have to be heavy increases in taxation and drastic reduction in -social services and unemployment relief. All this tended to create dissatisfaction with the Government, and those conditions had caused the people of Germany to swing largely to either of the extreme parties, the Hitlerites or National Socialists on the extreme right, or the Communists, on the extreme left. Those parties were now very strong and each was equally determined to repudiate reparations” if it came into power.

FEARS OF REVOLUTION. “It looks at present as if the Moderate Party Government, under Dr Brueiiing, is in a minority,’ stated Mr Lawn. “Last winter there were 5,000,000 unemployed in Germany and it was felt that it was going to be very difficult to survive the winter without a revolution. With conditions such as they will be this winter, with the possibility of 7,000,000 or 8,000,000 unemployed, there is a grave danger of revolution.

“A revolution would certainly mean the wiping out of reparations. If the Hitlerites get into power they would introduce a state somewhat similar to Fascism, while the Communists would have some form of Soviet republic. ’ The question of reparations was inseparably bound up with the interAllied debts, because Britain received from France, Italy and other debtois, and from Germany in the form of reparations, enough to pay £32,000,000 per annum to the United States. German reparations were divided among the countries in the following percentages : France received 52, Britain 22, Italy 10, Belgium 8, and other countries smaller percentages. France received from Germany sufficient in reparations to make payments to Britain and America on behalf of war debts, plus a considerable sum that helped to balance the French budget. French railways last year lost a large sum of money, and seriqus difficulties in public finance would follow if the reparations broke down.

FORCING CANCELLATION. The question then, arose whether, in the eveiit*of a political breakdown in Germany and a revolution which threatened reparations-, France would remain inactive or intervene by some form of military action. On the other hand, while there was this possibility of revolution and war, there was also the possibility that the seriousness of the world catastrophe that would be involved would force on the governments of the principal countries, such as the United States, Britain and