ECONOMIC WELFARE

Manawatu Standard, Volume LVIII, Issue 51, 28 January 1938, Page 8

ECONOMIC WELFARE

3.15 P.M. EDITION.

CO-OPERATIVE SCHEME. M. VAN ZEELAND’S REPORT. (United Press Association—By Electric Telegraph.—Copyright.) Received January 28, 1.0 p.m. LONDON, Jan. 27. . M. Van Zeeland, in presenting his report, after a comprehensive survey of the international economic malaise, says the heart of the problem, if the nations wish to diminish the obstacles to international trade and restore it to a degree of flexibility allowing of its development, is the necessity of inducing many countries to mitigate or abandon their measures of protective self-sufficiency and to return to a more complete system based on an international division of labour. It is impossible to divide the nations into distinct economic groups, some practising complete autarchy and others strict international free trade. It must be recognised that economic relations are on a very different basis compared with before the War. Formerly international exchanges were effected across the frontiers between individuals, private firms, and private interests. To-day international economic relations are taking on more and more the character of exchanges be tween economic units constituted by the States themselves.

Referring to the efforts of some countries to replace raw materials with synthetic products because of their inabilitv to pay for raw materials after the shutting-out of their manufactured goods bv other countries, M. Van Zeeland adds that the protectionist policy of countries that produce raw materials is reacting against themselves. Moreover, it damages those they count „s their traditional customers. Vicious circles are thus established. The report visualises a pact of economic collaboration embracing the largest possible number of States, or in any case open to ali. Its object would be to assist the participants to raise the standard of living of their nationals.

CONDITIONS OF PACT. M. Van Zeeland says that any pact would contain two parts —the first negative whereby the participants would agree to abstain from practices contrary to the general interest and the second positive, whereby the participants would bind themselves to examine in the spirit of mutual assistance the problems arising from their economic relations. Separate and more detailed arrangements could be concluded under the aegis of a general pact. * , The first step is a conference at least of France, Germany, Britain, the United States and Italy to discuss whether to accept the report as a basis for discussion on economic collaboration. If the answers are constructive the next stage will be the appointment of a bureau, which would invite all the States to explain their international commerce difficulties and what assistance they expected from other States. , , . , The report suggests that mandates should be made international. It considers that it would perhaps be opportune to adopt in respect of colonies the system at present obtaining in the Congo Basin. \Vhere this system could not be adopted the possibility might be examined of creating privilege companies, whose capital would be divided internationally to offer real guarantees of impartiality. SANCTITY OF CONTRACTS. M van Zeeland does not minimise the difficulties. He points out that some States do not sec any solution of their economic problems, except by a redistribution of colonies. Others attribute their difficulties to exaggerated protectionism and others blame the unequal distribution of capital and lack of adequate understanding of the money markets. Many circles blame, above all, intensive rearmament.

M. van Zeeland takes the view that repeated shocks to the. basic principles of international law are apernicious infiucnce on politico-economic relations, and adds that it is high time to restore the sanctity of plighted engagements and respect, for international law.

The report recommends the suppression of industrial quotas. The suppression of quotas does not imply a ban against dumping measures or the suppression of cartels. M. van Zeeland outlines the illeffects of currency instability and considers it too early to return to the ..old standard, but it would be possible to revise "bind extend the tripartite monetary agreement between. Britain, France and the United States to lii elude Belgium, Switzerland, the Netherlands and auy other countries agreeable. The report emphasises the urgency for suppressing the restrictions on payments for merchandise, but recognises that it is necessary first to arrive at an agreed adjutment of external debts. Debtor countries must be supplied with credit facilities to enable them to support their export trade and finance part of their imports. M. van Zeeland outlines the machinery for doing this through the Bank of International Settlements. A COMMON FUND. M. van Zeeland specially commends the suggestion that the collaborating nations establish a common fund, the resources of which might be ujpplied to facilitate and finance legitimate trade. The fund would merely operate where normal methods were insufficient. The need for exceptional measures would very soon disappear if international economy recovered its vigour and flexibility. M. van Zeeland, commenting on the evils of abnormal tariffs, considers it necessary for the Governments to undertake not to raise and widen the range of tariffs and to carry out a o-radual reduction of duties. It is impossible to over-estimate the direct and indirect result ol an Anglo-American agreement.