The Daily News. TUESDAY, APRIL 5, 1921. ECONOMIC PROBLEMS.

Taranaki Daily News, 5 April 1921, Page 4

The Daily News. TUESDAY, APRIL 5, 1921. ECONOMIC PROBLEMS.

At the annual meeting of Barclay’s Bank, of London, the chairman (Mr. F. C. Goodenough), one of the soundest financiers and economists of Great Britain, devoted some time to a consideration of the present critical position of trade and industry at Home. We take the following excerpts and comments from Barclay’s Review, and would commend them to the attention of our readers- They help one to appreciate the difficulties before Britain, and Europe generally, at the present time. Mr. Goodenough said: —

“We are now at the cross-roads, so far as the outlook of industry is concerned, and upon our choice of methode depends whether we return to prosperity, via a protracted or via a short period of distress and unemployment. The world is passing through a period of re-settlement, and if we take a broad view of the situation, especially as regards assistance to distressed countries, and the various complexities surrounding the indemnity payments and Allied indebtedness, I see no reason why we should not quickly recover from the present stagnation. But if our outlook is to be narrow, not only will trade revival be delayed, but our future will be prejudiced. We cannot afford to ignore the interdependence of nations—a more important factor now than during t'he period which followed the Napoleonic Wars—and our aim should be the creation of what would really be a Financial League of Nations, composed of all the countries a'ble to help. The matter is urgent, and the world cannot afford delay; our part is to show no hesitation in our readiness to take up our share of the burden.”

As to the first point emphasised by Mr. Goodenough, it is now generally admitted that some assistance to distressed countries is essential, states the Review. In the case of certain countries the difficulty arises that, owing to their continually, increasing issues of paper money, there is no stability of value, and, as a consequence, trading through normal channels becomes quite impracticable. The fact remains, however, that the countries concerned can only hope to attain to a better basis by getting back to work, and this they cannot do without outside assistance in the way of foodstuffs, raw

materials, machinery and such like necessities. ■ Assistance is, therefore, essential, but if it is to be fully effective, it must be given conditionally upon the adoption of sounder methods of finance. Such a stipulation would seem to be quite reasonable; indeed, trading without this safeguard, is equivalent to throwing goods into a bottomless (pit;. Dealing with this question, Mr. Goodenough said:

“It lias been thought by some that any remedial measures had better be left to private enterprise, but that is open to this difficulty, that in many instances the risks involved are neither banking, nor insurance, nor trading risks, but they are political risks over which private enterprise can exercise no sort of control. For this reason credit cannot be forthcoming from private sources to an extent which will be adequate to do what is required; and, although a great volume of credit has already -been granted to Europe since the Armistice, so little progress .has been achieved that it would seem that organised international action is necessary before any satisfactory results can be secured.”

Anything in the nature of organised international action would presumably involve some form, of international control, sufficiently effective to ensure that the goods as supplied .were used in a manner which would create employment, and, by enabling trade to be resumed, make possible the financial and economic reforms insisted upon by the controlling body. There are certain obvious objections to international control from the point of view of the country controlled. Difficulties may also arise from a divergence of views and interests aniongst the members of the controlling body. But these difficulties must, if possible, be faced, for in the case of those countries approaching disruption, haphazard and inadequate assistance is unlikely to do more than postpone the evil day—to act as a palliative from the aspect of the receiver, and to result in a total loss to the lender. Organised ami adequate assistance, however, would go to the root -of the trouble and not only put the country concerned upon its feet, but prove a remunerative investment. It. is apparent that the responsibility of providing adequate assistance to the various countries needing it, is too great for one nation to undertake, and it would therefore seem that organised international action is essential. In Mr. Goodenough’s words, “the only alternative would appear to be a general reconstruction after bankruptcy, which would involve enormous loss of capital followed by a long, painful and dangerous process of recovery, all of which would add to the difficulties of trade anil increase present unemployment. ’ ’