26 MARCH 1932, Page 30


Meanwhile, these unsatisfactory financial conditions in so many parts of the world find their reflection in an ever increasing number of unemployed, and what must be the ultimate effect of such a state of things upon political and social developments in the various countries it is most difficult to foresee. It may be, of course, that out of the very gravity of the situation will come some great move- ment in the direction of political and financial co-opera- tion which-will ultimately bring back not to one but to many countries renewed prosperity, and it can be admitted that, given the necessary amount of co-opera- tion and restoration of international confidence, the financial resources now dammed up, if set free, might work wonders in accelerating a trade revival. At the moment, however, signs of such co-operation are lacking, and I feet it the more necessary to draw attention to the extent to which our situation here may be affected by international conditions because it is quite possible that superficially those conditions may appear to react favourably. During the past few weeks the considerable rise which has taken place in sterling has been due to efforts made by foreign countries to send money here for employment, which means that, in spite of our having gone off the gold stan- dard, many countries, recognising the dangers attaching to their own situation, wish to employ some part of their resources here. In this very fact, however, lies a danger. Our own trade activities are not sufficient to give us use for extra foreign balances, and while one effect may be to increase the rise in prices of certain securities, such au advance, if based in large measure upon foreign purchases, may easily give quite a false impression with regard to the real economic conditions of the country. It 'is doubtless very trying that at a moment when we are doing some- thing to improve our own situation along the painful lines of economy we should still be threatened with disturbance resulting from unfavourable conditions in other countries. I am afraid, however, that we have to regard it as part and parcel of the legacies bequeathed by the disastrous Great 'War, and we may have to set our teeth for a while longer until there is a more general recognition by great countries such as France and the United States of the supreme need for. international co-operation if there is to be a return of