The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, NOVEMBER 10, 1931. THE DEPRESSION AND WAR. DEBTS.

Hokitika Guardian, 10 November 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, NOVEMBER 10, 1931. THE DEPRESSION AND WAR. DEBTS.

The economists are 'turning much at- ! tention of late to the intimate r»jlationship of the current, world de- | pression 'to the? burden, of the war | debts on many countries involved in I international trade. It has been found that with production developed to such a high degree in so many ! manufacturing countries, there J s now 1 a surplus of products because of the | falling off of exports due to the inability of foreign buyers to maintain a satisfactory state of trade. This has led to- a congestion, and the shortening of hands in industries, a growth of the unemployed in the respective , countries, and a realisation of the j depression. It has been pointed outagain- and again, that the .sure cure .of the depression is an increase in the world, consumption of commodities, but there is a lag in this respect oc-ca-use of internal diabts to lie provided for. Debts arising from the war have nothing to show in return for the deficit. The debts were incurred for purposes of dissipation which has left nothing that is -reproductive. The attempt to- meet these debt obligations has been an enormous drain on the countries. The world situation prompted Mr Hoover’s proposal for a year’s holiday in war debt payments. But this was a palliative only, and created no scheme to meet the acute financial problem which had been created by the, draining effect of meet ing the war debts. Tbe holiday helped to create home credits for the time being which were used no doubt to useful effect for domestic requirements, but the year is passing rapidly, and without nerparation to meet the obligations in sight, the world impasse will be presented again when next payments are due. This is particularly -the case with Germany, which is face to face with a financial breakdown because of the burden of J the reparation payments on top of the debt load. The cancellation of war debts ha-s been in the air since j end of the war. Britain made a generous offer to that end at the outI set when some idea was formed of the world debt to be provided, for,- annually. The effect on world trade was judged rightly, but the scheme was not acceptable to the creditor nations which looked anxiously for their surplus payments. But the. world perlctwr lias justified the wisdom of the British proposal, and the year’s holiday promulgated by the United States was a, further justification. The nations must co-operate more, and thereby create a degree of confidence to justify generous action in regard to war debts. International trade is jndisponsible to' economic advance, and only a freeing from pressing liabilities can help bring that assured degree of prosperity. Before the Avar international trade was on normal lines, and that happy condition of affairs cannot be restored until the burden of debt a world legacy from the war, /is discharged). Ordinary acquittanceby payment is not- possible. The position can he met only by cleauTng the slate. Something may result from the late conference of the United States and France, but until the secrets of that meeting are revealed there will be the demand on tire part of economists of the world for a serious review of the world finance with the objective in sight- of wiping out the great burden of the war debts