The Daily News. FRIDAY, NOVEMBER 26, 1915. BRITAIN'S ECONOMIC PROBLEM.

Taranaki Daily News, 26 November 1915, Page 4

The Daily News. FRIDAY, NOVEMBER 26, 1915. BRITAIN'S ECONOMIC PROBLEM.

Even those who are totally unacquainted with tlie mysteries of monetary exchange and the intricate fabric on which the trade and commerce of the Empire rests, may nevertheless readily understand that the prolongation of the war is seriously affecting the standard value of gold. An expenditure of five millions sterling per day quickly mounts up to a colossal total, and though we know that this money is so much war waste we also know that it must be provided until the end is reached. What many people fail to realise is the widespread effect this war expenditure is having on national life, as well as on manufacturing industries, trade and commerce. To-day's cables throw some light on the matter in connection with »u Address given by Lord Incheape at

the. lustitute oj' Bankers. There are few men in the world of commerce more fitted to deal with this momentous subject. Lord Inchcape (better known, probably, as Sir James Lyle Mackay), is one of the foremost Anglo-Indian merchants, and his career lias been one of brilliant success not only as a merchant and bank director, but as a greatly trusted plenipotentiary and special commissioner in important matters affecting Home and Indian affairs, as well as on various questions concerning railways, shipping, trade and commerce. Any remarks, therefore, made by such an authority should command serious attention. Eeferring to the loan raised for Britain in the United States, Lord Inchcape rightly regarded it as the best temporary expedient for restoring the inequality in exchanges caused by the excess of Imports from America over the exports to that country, but he emphasised the fact that the expedient was at best a palliative and not a specific for the evil that has arisen through the oxigienees of the war. It will be apparent even to the lay mind that there can be but the one cure mentioned by Lord Inchcape—the restoration of a favorable balance of trade. But against the attainment of this most desirable remedy there is the insuperable difficulty during the war of maintaining, let alone increasing, the exports. On the one hand ordinary industries have had to give way to war demands for munitions and equipment. On the other hand every available man who is not engaged on munition work, and is eligible for military service is Required in the ranks. As a consequence factories are denuded, farms left shorthanded, and labor for both land and sea requirements absorbed into the fighting forces. Lord Inchcape considers that a reasonable give and take policy would enable Britain to pull through "and lick the Germans." Although it is not much qpnsolation to know that Germany is In a far worse plight -financially than Britain, we can derive much gratification and confidence from the knowledge that the enemy cannot much longer bear the strain. The German bankers named October (last month) as the time at which the war should cease unless serious financial troubles were to be faced. Lord Inchcape indirectly supports that opinion though he only alludes to the German financial position in general terms; but ho emphasises that every successive loan raised in Germany had added to the inflation of the currency, so that the time must come when the irreducible minimum is reached, and Germany will be a financially exhausted country. Her dream of vast indemnities wherewith to refill the treasury will never be more than a shadow that passeth in the night. The dream passes, but the nightmare of unredeemed securities will be with her for many decades. With an.accurate and comprehensive knowledge of Britain's financial position, Lord Inchcape has no fear for the future, though he rightly stresses the need for economy. "I believe," he says, "that to-day is the darkest hour before the dawn. It may be three, six, nine, and possibly twelve months, but, as certain as the sun will rise, so will Germany be crushed, and the world's peace be secured for another century." These are not the idle words of a mere optimist addressed to the gallery, but the firm conviction of one who is preeminetly fitted to express an opinion on the subject to the foremost financiers of the Old Country, and It should not fail to carry conviction.