The Daily News. THURSDAY, JANUARY 5, 1922. REVITALISING CENTRAL EUROPE.

Taranaki Daily News, 5 January 1922, Page 4

The Daily News. THURSDAY, JANUARY 5, 1922. REVITALISING CENTRAL EUROPE.

The movement that has been started with the object of re-es-tablishing economic activity in Central Europe is bound to attract world-wide attention. The matter is one that rightly comes within the province of financial experts to deal with in practical application, yet without the support and backing of the leading statesmen of the countries affected by and interested in the scheme, there would be small chance of its success. It will not be disputed that until economic activity is re-established, Central Europe cannot be revitalised, and without the resumption of prewar industrial operations the markets for raw materials must suffer for laek of that healthy demand which promotes progress and prosperity. \ Such a complex question can only fittingly be approached if the spirit of co-oper-ation goes hand in hand with that of mutual trust and confidence, together with mutual goodwill and determination not only to investigate all possible methods of practical politics and finance, but also how any general fund that must serve as the pivdt of the movement can best be created and applied. The conference of Anglo-French financiers and business men has already agreed upon a scheme for revitalising the economic activities of Central Europe by means of an international company, cr syndicate, with a capital of forty millions sterling, according to one authority, but of only twenty millions according to another. To the lay mind it would seem that even the larger sum would be far from sufficient to meet the needs of the ease, though it would serve as a starting point which could be enlarged as eireunfstanees required, for having once embarked on a project of such vital and farreaching importance it would be imperative to see that the schefaie was made thoroughly effective, otherwise the last state of affairs ' would probably be worse than the present. Every country abroad has suffered economically from the war, though in Varying degree, while all the European belligerents expended over that international disaster more than they raised by taxation, and are, therefore, heavily in debt, but the extent to whidh these countries are financially indebted beyond their own borders is trifling compared with the total indebtedness each has incurred at home, while restricted production during the war, together with its colossal waste and ravages; have aggravated the financial and economic malady. The only effective remedy is obviously high produc-

tion on the one hand, and drastic economy on the other. Commodities mean wealth, whether retained in the country of origin or sold to some other country; wealth means ability to pay taxation, which, in turn, meets interest on borrowed money and the gradual extinction of indebtedness. The financial outlook of a country, therefore, depends upon its power of production and economy. The suppliers of primary products and raw materials need markets for theii- goods, hence the interdependence of the nations and the need for production as well as the necessary money wherewith to supply the urgent wants for industrial activities and the necessaries of life. The problem to be solved is: How are the European countries, nearly all impoverished and heavily in debt, to buy the things they need in order to re-establish themselves in the businesses necessary to their salvation? The outstanding obstacle to any revitalising scheme is the low value of the paper currency of several countries which are flooded with it, especially Ger-

many, Austria and Russia, the last named having at one time printed paper roubles at the rate of three hundred million a day. Even the British Empire largely increased its note issues. Thus the exchange trouble became a barrier to increased trade and created an evil that has yet to be remedied. The scheme outlined by the FrancoBritish experts appears to be a compromise between the establishment of long credits and the barter system. Apparently each nation is to subscribe to a central guarantee fund controlled by a permanent committee) consisting of two leading British and two French financial experts possessing special business qualifications, who will allot goods against credits in proportion to the money subscribed by each country. Practically they will constitute an international clearing bank and commercial exchange, the capital being subscribed by private individuals, presumably receiving stock or bonds. There is certainly the germ of a practical remedy in this project, which is to be subimitted for the consideration of : the Suprem e Council of the Alilies, who will doubtless discuss : its political as well as its economic bearings. Possibly, after the matter has been well considered and reduced to concrete shape, it may be deemed advisable to refer it to the Washington Conference, inasmuch as the success of any scheme of this nature must largely depend on the attitude evinced towards it by the United States. That some steps must be taken to j improve the present economic conI dition of Europe is beyond ques- | tion, and it is, therefore, satisfacI tory to know that a start has I been made. It is to be hoped that I further developments will follow I at an early date, though it would I be unwise to expect that such a ! complicated matter can be ari ranged without the expenditure of much time and discussion.