STABILISING CENTRAL EMPIRES.

Taihape Daily Times, Volume XI, Issue 3484, 12 May 1920, Page 2

STABILISING CENTRAL EMPIRES.

BRITISH-ANIERICAN COAIBINE‘

B.\NKERS TO RESCUE.

SAN FRANCISCO, April 7

There has been a good deal of discussion in American financial circles anent the Llistressful condition of central European countries, ilnpoverisllml as they undoubtedly are through the stress of the recent War, and this dis» cussion has been eagerly pal'l‘iCip£ll(~(i in by Great Bfitain, espe<‘.izlll}' by fimmciers “over there," with the nesuit that illi.ernationul lmzxl-:(—~r.~: h-.~.w been organising a p:'etem.ious sc7.leln-;a whereby they promise to I‘u>,‘-11 to the rescue’ of “starving Europe,” as it is generally designated in S€‘LlS‘cltiOl'l:l} Ame)-'iCall newspapers.

The “New York Herald”—or rathe,“Sun and Herald,” as the two papers have now combined fo-rces——on April '3, printed a most interesting story on ithe subject, as follows:—— . “Your correspondent is authorised ,to announce that steps have been taken for the formation -ct’ the most’ ipowerful banking combine in the history of peace-time finance for restoring the industry and ecollo‘mTc life of !t’.le old Central Empires. The participants in the organisation are Lloyd’s Bank ct‘ London. the Joint City and Midland Bank, Fred.eric.l~: Huth and C-0.. Morgan, Grenfell and Co., ‘Goschen and Cunliffe, Rothschild and ‘Sons, and Schroeder and Co. Tllese leaulers of British finance prepared a ‘practicable. scientific rSCll€‘lllP along the lines of a. semi}l)£~ll't’ci‘ syst.eln by which raw materials iwill Ibe allowed to flow into Central lE»urope. the banking syndicate acting trustee with the moral support of the British Government and the strict guarantees of the Central European gover-nnieiits that raw materials will remain the inviolate property of the syndicate t'ronl the time they have entered the countries in which they‘ will l3e“'fif:lntifactur'erl until they are; exported therefrom. The intentions of bankers back ofl the scheme are to start a plan WOl'l{ing in Austl'ia and adjoining States first, and later if this prove successful. increase its scope and endeavour to enlist bankers in other coiiiitries andl extend the scheme to all Central] Europe. “One of the chief features of the‘ plan is that it obviates the necessity! for any governmental financial help,{ asking only moral support. At the same time it does not interfere with private industry or accepted banking methods. The plan proposes the re-l establishment of Austro-Hungarian] secession States and the text. of it, which was handed to the correspond-H ent by a member lot‘ the group, follows in part:—— ‘ “The States into which the AustroHunga'ria.n Empire has been broken’ up are suffering from. I

“I.Want of raw materials from the world outside. “2. Breakdown of normal distribution and of exchange of products of these differ-ent I'S-ates as between thenlselves. “The theory of the proposal scheme is based on the following lines of economic rensoning:——— “Let us imagine. for the sake of -argument, that the whole ‘cf Europe ard A.lnericn is one economic area, with no frontiers or restrictions of traffic and trade asibetween one part. of this area and another. It would not matter in which part ct‘ such area. factories were situated, in which part crops and raw materials were produced or where coal mines and iron fields lay. For economic purposes these sources of wealth would be the property of no separate nationality, but of the whole. The situation would ‘be precisely the same as it is in Great Britain or in the United States to-day. The only restriction on free exchange of products would be difficulties of transport. over clistances——laud rcr sea ——t'ronl one part of the area to another.

“Austro-Hungary, as the province or country ot‘ such area. and now starving‘ for want of raw 111ateria1s_ would be regarded from the business point of View precisely as would Lancashire or l\'lass-.lchllsetts if they were in :1 similar unfortunate situation to—‘rlay. In View of the shortage of c=o-nnnodl'-ties all sorts of such excellent factories and highly-skilletl labour and management as exist in Austriajwould not be allowed to renmin unprocluctive. Capital would flow to these provinces where the cost of it in terms of gold‘ value was so cheap and where the pussilbility of profit was so great. Difflcllllies of transport would be no greater than they would elsewhere. Imleed, Austria-Hungary, I g'é'()gl-a.phic-ally, is in :1 favourable situation. “Now the only reason why all this does not happen in the case of Austria 'fo-d‘rl.V is that the various nations have set themselves up within hard and fast frontiers, and all sorts of economic restrictions exist: which hamper the normal course of trading, and surround it. with" incalculable :riS.k."’