The Daily News. TUESDAY, MARCH 16, 1920. EUROPE'S ECONOMIC DIFFICULTIES.

Taranaki Daily News, 16 March 1920, Page 4

The Daily News. TUESDAY, MARCH 16, 1920. EUROPE'S ECONOMIC DIFFICULTIES.

T e Supreme Council's declaration on the economic conditions of the world contains no new matter, and the recommendations made practically follow the lines which have been advocated by all who are qualified to form reliable opinions on this vital matter. The fundamental principle affecting reconstruction is that of equitably distributing the burdens inherent to the process, so that every country may benefit in some way or another by the economic restoration of Europe, or alternatively share in the disaster which must come if matters are allowed to drift. The twelve months that have elapsed since the war have abundantly proved that the. matter will not solve itself, for the economic position of Europe is worse, not better, than it was at the date of the armistice. Hence the growth of opinion that international effort must be taken by those who have the largest means —those who suffered much less than the original belligerents.-Af-ter surveying all aspects of this vitally urgent problem, the Supreme Council has made certain recommendations which place the onus of reverting to normal economic relations on all the nations by friendly co-operation. In the forefront is placed the need for greater production and the elimination of profiteering—an evil that appears to be growing instead of diminishing. Next in order is the need for the suppression of extravagance and a reduction in expenditure, after which Governments are urged to reduce recurrent expenditure so as to bring it within the available revenue ; to impose the necessary additional taxation, and to curtail the issue of paper money. The encouragement of industry is also stressed in the direction of supplying credits for essential raw material, and the removal of obstacles to the easy interchange of necessary commodities. Manifestly the'

problem of restoring the devastated areas, especially in North France, occupied the serious attention of the Council in view of the German'indemnity not being forthcoming. The proposed solution by means of loans in anticipation of reparation payments and not covered by national security, is a new departure that will meet with criticism. Finally it is laid down that the sooner the total of Germany's liability is fixed, the better it will be for all concerned. It is only natural that the French Government should take a firm stand on the demand for the rigid performance of the Peace Treaty by Germany, and there is much force in the contention advanced that Germany's economic straits should not be placed on the same footing as those of France, who alone appears to be in danger of getting little except burdens, although her industrial and economic plight is the direct result of Germany's invasion and wilful damage—damage inflicted intentionally to cripple French industries for all time. Had positions been reversed at the end of the ! war Germany would have exacted the uttermost farthing from France and made the French people toil and slave for generations to supply German requirements. Since the Armistice Germany has persistently endeavored to evade the penalties imposed on her, and has continued to whine about being forced into bankruptcy unless the penalties are mitigated. At the same time she is breaking the Peace Terms by spending large sums on quasimilitary organisations, aviation equipment and warlike stores. If the German authorities took the liabilities of their country seriously they could have converted into cash all the Hohenzollern property and resources wherewith to help in the restoration of North-] em France. They could have made the utmost use of their raw materials, after meeting the provisions of the Treaty, but they have signally failed, for they find the 'policy of avoidance pays better than that of performance . It has been stated that the problem of Central Europe has three aspect —•the humanitarian, the political, and the economic—neither of which can be altogether ignored. From the humanity point of viov; people are dying of cold and starvation; politically, the situation is breeding Bolshevism, and economically the lack of ready money to buy goods is seriously inflating the currency. Apparently the Supreme Council is dominated by humanitarianism, instead of by strict business principles. The reply to German threats should be final and absolute, for until the Germans realise that the Allies are determined to enforce the provisions of the Treaty, there will be no concentrated effort on their part to comply with the terms. France refuses—and rightly so—to accept a "disguised revision of the Treaty" or a diminution of the powers of the Separation Commission. The restoration of French territory and industry >r, of far greater importance than the camouflaged economic straits of the Germans. France may well ask why the innocent should suffer so that the guilty may flourish and pursue their profitable occupation of duplicity and intrigue. It is high time the Germans realised that their sins involve suffering. Until Germany is brought to heel there can be no effective steps in reconstruction, as the accident of a moment may necessitate the application of armed force. In this respect affairs in Turkey and Syria are none too conducive to peace. In fact, the outlook just now -is decidedly unprepossessing. The one recommendation of the Council that all Governments may well profit by—if they adopt it, which is not probable—is to reduce departmental expenditure. The New Zealand Government evidently needs a reminder on this point, as the returns for eleven months 'ended February 28 in each of the last three years show an extraordinary rise, amounting in the period to fifty-five per cent,, the increase for the present year being nearly two millions and a-half on that of. the previous year. The outstanding need is the restoration to normal of the standard value of the sovereign, and this can only be achieved by economy and greater production.