DEBT PROBLEMS

Rotorua Morning Post, Volume 2, Issue 408, 17 December 1932, Page 6

DEBT PROBLEMS

E. Earle

Vaile).

THE AMERICAN VIEW INTERESTING SIDELIGHT ON WASHINGTON'S ATTITUDE ' GOLD BURDEN OF U.S.A.

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It has been suggested to me by •■ v al that I should publislx in your dely-rcad columns a brief account of a conversation I had in Wellington vit:' one of the heads of the Depart- • ! : nfc of Labour as it touches on sev- . ral fundamental economic truths. When I was travelling in the States some four years ago the Americans were rolling in wealth. They simply didn't know how to spend their j money quickly enough. But at the > «rme time unemployment was begin- : ning to show its ug'ly head. No proper informaifion was available and j there was a remarkable divergence between the numbers given by the Government and those supported by labour organisations. Having talcen a deep interest in the unemployment problem for many years I procured an introduction to the Secretary for Labour, and proceeded to Washington. Unfortunately he was away and , I was handed over to his ehief of staff. After I put a few pertinent questions to this gentleman he remarked rather bluntly that all the ills of the world were due to the stupidity of the English and the falsity of their ! political economy. Thereupon I enquired what was his scheme of things. Boiled down his idea was that a country should neither import nor export but worlc only for its own citizens — a theory then very popular in the United States. When he had finishef I said "Well, that may be barely possible in a great country like the United States of America, which' is nearly as big as the whole of Europe i and within whose borders there is | absolute free trade. But take the case j of New Zealand. We owe you on a ' trade balance about £5,000,000 a year which we try to pay with an er.cellent quality of butter. However you shut it out, preferring to eat a sc rt of cow grease which you make for yourselves — but that is another story. Tell me, how shall we pay you ti at £5,000,000?" "Of course you'll scnd up the money." Cannot Take Gold "With your tariff in the way that means gold," I said, 'but that is quite irnpossible. We can make any quantiiy of butter but we can't possibly make £5,000,000 in gold; besides if W3 could send it to you, it would do you no good — and perhaps harm." The old gentleman looked absolutely as-fconished and exclaimed "How do ycu make that out stranger ?" "Let me give you a small personal illustrat'on," I replied. "I was going to travei in the East where gold is at a premium. Your fleet was in Auckland harbour paying everyone with Engiuh sovereigns. I coliected £200. But I couldn't get away and put the gold in my safe. After a while I scratched j tbe back of my ear and asked myself 'Why are you paying the Bank of New Zealand 6i per cent. on an overuraft when you have gold?' So I rushed the gold up to the bank and paid it in saying 'Now you blighters can lose the interest on this gold.5 Too Much Gold "That is what the United States is d oing muitiplied by hundreds of milli ms. And you already have so much u lused gold and unused credit that it k. likely to give you a bad financial in- '■ gestion. Now, mark my words, before many years the United States v.ill have a meeting, not of its creditors, but of its debtors and they will say to you 'If you won't take food you'll darn well get nothing.' Moieover," I continued, "look at the employment you'd give in New Zea- ! land if you would take our butter." What's that to us, though." "Only j this," I said, "that we could then buy t many more of your motor cars and i much more sugar. You're cutting j o f your nose to spite your face." I left him deeply thinking whether ! there was not a great deal more in j P'nglish political economy than he had l thought of.