The Daily News. SATURDAY, NOVEMBER 12, 1921. ECONOMIC CONDITIONS.

Taranaki Daily News, 12 November 1921, Page 4

The Daily News. SATURDAY, NOVEMBER 12, 1921. ECONOMIC CONDITIONS.

According to a reeent cablegram from Washington, it is considered that the scope of the Conference on armaments must include a survey of financial aud economic conditions throughout the world. The American House »f Representatives has already taken action in relation to war debts by passing a Bill to create a Commission for funding those debts, and it is stated that President Harding has determined to secure the passing of the Bill by the Senate in order to enable the delegates at the Armaments Conference to talk with full confidence thereat on this immensely important subject. The two main objects of limiting armaments are the preservation of peace and materially reducing the crushing burden entailed on the world by the upkeep of large armies and navies. The colossal cost of the war to all the belligerent nations, coupled with Germany’s liability for reparations and the maintenance charges connected with the armies of occupation now on German soil in order to ensure the observance of the armistice and peace conditions, is staggering in its immensity. Great Britain’s outlay alone up to March 1919 was £9,600,000,000, of which £1,400,000.000 was advanced to the Dominions, which, ill addition, raised loans to the extent of six hundred and fifty-six millions, while India made large contributions by loans and gifts. If to this amount the cost of the armies of occupation is added, namely, the Allies one hundred and fortyfour millions and America sixtyseven millions, it will be seen that the Allies’ direct cost to March, 1919, plus the current expenditure on the armies of occupation, approaches twelve thousand millions. It has been estimated by American financial experts that the financial burden incurred in the war by the most important States engaged totals about thirtynine thousand millions. Such a terrific burden may well make the stoutest heart quail, and must surely justify the Washington Conference in devoting earnest attention to the economic phase of the armaments’ question. Tn the opinion of the Washington correspondent of the London Times, there is a steadily hardening feeling that the more closely the Powers study the situation the more surely will they realise that courageous grapplings with these questions is a most vital necessity. It is the problem of the payment of international debts that lies at the root of the present economic disorganisation, including the payment for reparations by Germany. There is a noticeable move in progress having for its object the cancellation of a large portion of Germany’s liability. It is true enough that Germany can only pay in goods, but that the Allies have raised considerable tariff obstacles to payment by that means; also that only a miracle can avert a most serious financial crisis in Germany when the next payment of indemnity is made. The fall of the mark presages the crisis, perhaps the entire collapse of her monetary and credit sys-J terns. How far this collapse is; due to the machinations of the Germans themselves remains to be seen. Certain it is that they will not shoulder their reparations obligations if they can possibly get out of them. No valid reason has been advanced for cancelling all or any of Germany’s reparations penalty, though it must be confessed the action of the Allies in hindering the import of her goods ' makes payment very difficult in- ’

deed. The miserable pretence made of trying the culprits responsible for hideous war crimes is quite sufficient to justify the Allies hardening their hearts, apart from the certainty that the Germans would only laugh up their sleeves at the success of their camouflage tactics. It should be rt point of honor and justice that Germany should be made to pay in full, though facilities for the acceptance of goods instead of gold might be offered, and an extension of time granted if a proved necessity arises. The real solution of the present economic problem rests with the United States, and unless some arrangement is made for dealing with the debts to that country by Britain and her Allies, the present financial tension must continue. It is probably true that intense aversion exists in’the Senate to any cancellation of debt, but if America desires to solve her own economic problem she can do so, for thereby alone can the position be met. Given the will, the way is open and waiting to be used.