ECONOMIC OUTLOOK REVIEWED.

Taranaki Daily News, 6 December 1919, Page 12

ECONOMIC OUTLOOK REVIEWED.

EUROPE'S PLIGHT TO-DAY. ' •SOME JIEMARKABLE JACTS. ifcjir George Paish, for many years editor of tne "Economist," has a most informative article in the "Contemporary Review," on "The Economic Outlook in Europe." He gives some remarkable facts about the financial conditions today of Great Britain, France, Italy and Germany. Note the cheerful tone in which he writes of Great Britain's financial strength and credit. "The financial strength and credit of Great Britain are still undiminished," he •says. "Prior to the war the nation's wealth was calculated at about £16,000 millions, of which some £4OOO millions 'consisted of foreign and colonial securities. During the war Great Britain has lent to her Allies and Dominions a sum not far short of £2OOO millions, while, on the other hand, she has sold a moderate amount of her previously held foreign investments, and has borrowed * abroad about £ISOO millions.

WE OWN ,£3OOO MILLIONS ABROAD. "Placing the new debt against the new 'investments her foreign investments are nearly, if not quite, as great as they wore prior to the war. At the moment the money she has lent to Russia is lost. This amounts to about £6OO .millions. She has also lent £SOO millions to France and nearly £4OO millions to Italy, as well as nearly £4OO millions t» tie Dominions and to minor European Powers. Even were the whole of the naw investments to be disregarded Great Britain would still posseas foreign investments of nearly £4OOO millions against the loans she has incurred abroad. A reasonable estimate is that Great Britain now owns foreign investments to the nominal value of over £SOOO millions, against which she'owes about £ISOO millions abroad, and that after allowing for the repayment of her foreign debt and writing on" her doubtful investments the net and real value of her foreign investments is at least £3OOO millions. "In other words, on the basis of pre' war' valuations, Great Britain still possesses net wealth to the value of at least £15,000 millions. If current values oE land, houses, and property of all kinds are accepted, Great Britain's wealth is now very much greater than it was prior to the war. NOT BEYOND OUR INCOME.

"Nor must it be supposed that Great Britain is living much beyond her income. It is true that her foreign trade shows a vast excess of imports over exports, the excess for the first »even months of the current vear amounting to £402 millions, or at the rate of £OOO millions per annum. But it must not be forgotten that Great Britain is still receiving, either nominally or actually, a great income from her foreign Investments, and it irftist also be noted that she is deriving a, much greater income from shipping than ever before, notwithstanding the reduction in her effective tonnage, and that when the gross ! income from her ships (those comma i'to this country are charging over 70(1 per cent, more for the carriage of homeward freight than they did prior to the war) is added to the net income of her foreign investments and to the sums received in payment for the services of her bankers and others rendered toother nations? the deficiency is found, to be very small, or even non-existent. "Indeed, Great Britain would have little difficulty in paying her way were it not for the help she continues to render, to the-other Entente nations. The depreciation of the sovereign in certain countries is entirely due to the fact that Great Britain is granting very large credits to the Continent, and, therefore, must herself obtain credit" from America and other countries. From the very beginning of the war until the present day Great Britain lias paid her way. THE DISASTROUS WAR ON FRANCE.

"Upon the well-being of France the effect of the war has been exceedingly serious. It has destroyed the Tame of the greater part of her pre-war investments, which had been distributed over the surrounding nations, and more particularly in Russia. It has destroyed a considerable portion of her factories, her mines, and her farms. Tt has cut on, for the time being, her great tourist income, and it has brought about a severe contraction in productive power by reason, not only of the physical damage ■to property which can be restored, but of the great loss of and injury to her man-power, which cannot be repaired. In this situation she has to reckon with the fact that the Central Powers are in no position to make redress or even to provide funds for the work of reparation, excepting over a long period of years. Beyond all this France has been compelled to incur a debt abroad during the war of over £I2OO millions, and is getting deeper into debt day by day. WHAT FRANCE NEEDS. '

"The remaining -wealth of France is, however, very considerable, and if it were possible for her to rebuild her factories, restart her mines, re-establish her farms, and re-open her ports to tourists, she would, in a very short time, be able to pay for ail the produce ami the goods she needs without running further into debt. It is calculated that the food production of France in the currpnt year is not much more than half of what it was prior to the war. and beyond requiring to make good this deficit by purchases abroad she requires great quantities of foreign raw material as well as of materials for the rebuilding of her ruined cities, factories, and farms. "It ia of the very greatest importance, not only to the welfare of France, but to the well-being of the whole world, that the French people should be supplied with all the food and material they need in order to regain their prosperity. Unless they can obtain •the additional credit they will want in the coming ! twelve months their condition will indeed be deplorable. In the first four months of the current year the imports into France were at the rate of £9GO millions a year, while the exports werei at the rate of only £lO2 millions per annum, the excess of imports over her exports being, therefore, at the rate of no less than £7OS millions per annum. "But if the condition of France and of Italy is deplorable, how much worse is the situation in Germany and in Aus- ] tria? A UNITED LOAN. "While no- single nation, not even the" United States, is strong enough to supply Europe with all the credit it needs in. the fcest twelve months, the League

of Nations, which would comprise practically the entire world, would possess all the economic and financial strength required to supply Europe with additional credit. With the final res ation of peace and with all nations acng in co-operation, the security ior a League of Nations loan would be so good that it would be readily accepted in payment for all the food and all the material for which payment could not be made in kind, Furthermore, the credit which the League of Nations would enjoy would be so great that no difficulty whatever would be experienced in providing France with all the funds she needs to undertake the work of restoring her damaged factories, mines, and farms without further delay, and thus enabling her to resume her normal rate of production."