WELLINGTON NEWS

Hokitika Guardian, 15 December 1931, Page 6

WELLINGTON NEWS

THE SPREAD OF GLOOM. (Special Correspondent). WELLINGTON, December 14.* Last week Sir George Paish made jsonie gloomy statements that must ■send :a shiver down the backs of responsible , mem throughout the worm. Sir George Paish is one of the leading economists in’ the world and ranks ,with the best. Economists who are worth anything do not speak at random. They go- deeply into matters which they view from a different angle than do politicians and others. They reckon in different units. The economist thinks in terms of sterling, or of dollars, or of francs, in terms of exports and imports, in terms of produce, Kilowatt hours of electricity, figures of unemployment, wage rates, rent interest- and even totalisator jnvesments "enter into his.; calculation. He is cold-blooded in his.''examination and takes nothing for granted.. The economist; is -, at all times marshalling facts and collecting statistics. Sir George Paish, as already stated, ranks amongst the highest and greatest of world economists, and last week Sir ; George startled the civilised world by two or three pronouncements that were bold and very discouraging, if not wholly dismal. He expressed the opinion that there was not a bank in the world that was really solvent, which appears to be a very sweeping statement, hiit if we knew his reasons for saying so there may he a large measure of agreement with him. His further statement that America’s situation is infinitely greater than Britain’s is supported to a great extent by what the world has been allowed to know of affairs in the United States, now that the Americans are making any attempt at concealment, but because the various countries are too busy with their own affairs to give heed to what is taking place in other countries.

We know, however, that there is a vast army of unemployed in the United States, with millions on, the bread line and thousands facing starvation this winter. We have it on the authority of President Hoover that the country is face to face with huge deficits. The huge deficit figures were made up as follows: Deficit at the close of the financial year ended. June, 1931, 902,000,000; expected deficit at the end of June, 1932, 2,123,000,000 dollars, and a deficit, at the end of June, 1933 of 1,417,000,000 dollars. This totals up to 4,442.000,000 dollars, or approximately £900,000,000. The, deficit for tlttCpaht .fiscal year was covered by the.issue' of a longtermed loan; the anticipated deficit for the current fiscal year has been "partly covered by the issue of Treasury hills for 1,330,000 dollars. Now President Hoover proposes to heavily tax the people to make up for the consequences of—his faulty-‘administration. Piling up taxation generally results in diminishing returns, in any case it is doubtful if the Budget for this year and for 1902-33 can he balanced with the foreign trade of the country so greatly reduced. We must bear in mind all through that the United States hold about half the supply of the world’s monetary gold and it is obvious that the possession of such a hoard of glittering gold is not of much national benefit to the country.The United States is responsible for the bankruptcy of the nations of the earth including herself. She lias

forced the world into bankruptcy by : the brutality of her policy, which President Hoover tennis American idea!. It was suggested to her soon after the war that inter-governmental debts should be cancelled all round. The suggestion was made by Britain but ulterior motives were attributed to her, and she dropped tho matter. She was, however, magnanimous enough to intimate to her debtors in the famous Balfour Note, that .she would not demand more from them ; than she had to pay to the United States, The latter insisted upon her pound of flesh, and interest and amortisation of war debts was paid her regularly and in full up to June last when she was obliged, in her own interests, to declare a moratorium. Not content with insisting upon payment of war debts, she placed obstacles in the way of her debtors. Money due to the« United States must be paid 'in dollars, and the debtor nations by the sale of goods and services could accumulate dollars, hut they were obstructed in this by the imposition of a prohibitive tariff. Unable to pay in goods and services the debtors had to pay in bar gold, and that 1 is- mainly how America accumulated so much of the yellow metal. To restore prosperity, to give to the world a measure of hope reparations anfi war debts must be cancelled or cut very deeply, and tariffs every- j where must be reduced. So long as j this is not done so long will the world i .remain enveloped in depression.