Finance Public and Private
An Important Conference
IT may be doubted whether there are many Of our _ trialists and traders who recognize, how much greater and more disastrous might have been:the trade depression in the years following the War but for the strenuous work • which has been done by the Economic Section of the League of Nations" in aiding the financial recuperation of certain of the devastated countries of Europe. Com- mencing some years ago with Austria, financial aid has been rendered by this country and the United States to more than one of the countries of central Europe, and what has been of even greater importance than the actual amount of money which has been lent has been the pains taken by the League of Nations to see to it that such loans have always been linked with the necessary financial reforms in the direction of balanced Budgets and trialists and traders who recognize, how much greater and more disastrous might have been:the trade depression in the years following the War but for the strenuous work • which has been done by the Economic Section of the League of Nations" in aiding the financial recuperation of certain of the devastated countries of Europe. Com- mencing some years ago with Austria, financial aid has been rendered by this country and the United States to more than one of the countries of central Europe, and what has been of even greater importance than the actual amount of money which has been lent has been the pains taken by the League of Nations to see to it that such loans have always been linked with the necessary financial reforms in the direction of balanced Budgets and stabilized currencies. •
THE BANK AND THE CONFERENCE.
Indeed, I think it will be found by anyone who cares to give attention to the matter that, in the main, the principles laid -down by the Economic Conference at Brussels in 1920 have been, for the most part, the principles which have governed the course of action in aiding the necessitous countries of Europe. And the fact deserves to be emphasized if only for the reason that there is a failure, for the most part, on the part of business men in this country to recognize the importance of the great Economic Conference which commenced at Geneva on Wednesday of this week. The Governor of the Bank of England, however, who has been foremost in aiding the good work of the League of Nations, was prompt to recognize the importance attaching to this forthcoming Conference,. and last week he invited the British delegates to the Conference and the delegates from our Oversea Dominions to dinner in the Court Room of. the Bank of England. The occasions are rare when evening social gatherings take place at the Bank of England. Indeed, I should doubt if there have been any such gatherings for many years. But this exceptional action of the Governor, Mr. Montagu Collet Norman, may well serve to give a lead to the financial and business community in recognizing the importance which is attached to the Conference by those chiefly concerned in the monetary policy of Great Britain. And if readers of the Spectator should inquire what is the need for such a general International Conference on economic problems nearly ten years after the War is concluded, I will venture to give one or two very simple explanations, though the subject is so extensive and complicated that I would frankly counsel those who wish to follow. the matter more deeply to consult last week's issue of the Economist, which contained a very useful supplement setting out the general purposes of the Conference and the chief topics of discussion.
.e.URtRE'S POST-WAR PROBLEMS.
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To deal with the matter, however, more generally and comprehensively, a little thought will, I think, convince even the most casual students of finance that the problems are very great, very complex and very pressing. Perhaps the greatest of all is the change which the War has prodUced upon the general relations of Europe to the United States. Before that conflict America was a debtor . country. To-day, and as a consequence of the great start obtained by the United States through her three years of neutrality in the War, she is the leading creditor nation, and not only has she obtained so great a trade balance in her favour as to give to the dollar a premium over all other exchanges, but many of the countries of Europe are under tribute to the United States in the matter of War debts, the full effect of which is not yet seen because France has still to fulfil her obliga- tions in that direction. In this one circumstance alone, therefore, we find that the various States of Europe have a common difficulty and a common need for so conducting their affairs as to off-set as far as may be possible the effects of this great economic supremacy on the part of- the United States.
THE WAR OF TARIFFS.
Another problem which has arisen since the War and. which will no doubt be actively discussed at Geneva a the question of Customs tariffs and what may be termed the general distribution of industrial and - agricultural activities. Not only did the War itself throw almost all financial and commercial machinery out of gear, but by. the terms of the settlement the breaking up of the Hapsburg dominions into several nations increased the tendency for exacting Customs barriers to be set up between various States which had previously worked as a consolidated whole. There have, iri • fact, been for some time past severe tariff wars between the States, to the detriment of political and economic amity and of general prosperity. In some cases tariff wars have been ordinary tariff wars, partly for revenue '15urposes and partly to keep out competing goods, while in other cases countries 'clearly designed for agricultural activities have endeavoured to create • in their place manufacturing activities by this same process of prohibitive tariffs.
ALL INTERESTS AFFECTED.
Proceeding, therefore, entirely on economic lines, it will doubtless be the main task of the Conference at Geneva to consider afresh these problems, first in their relations to the main problem of the economic ascendancy of the United States, and, secondly, in their relation to the prosperity of each European State and of Europe collectively. A moment's thought will show the wide area over which the discussion must naturally range, for not merely tariffs but also questions affecting population and emigration are intimately associated with these. problems. If only the true position were more clearly. discerned, I am quite sure that the nation would realize more clearly than it does that the Economic Conference at Geneva is no mere academic affair, but, is concerned with matters vitally affecting the political, social and business interests of the various countries represented.
ARTHUR W. KIDDY.