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The New Zealand Railways Magazine, Volume 7, Issue 2 (June 1, 1932)

World Affairs

page 9

World Affairs

Pageant of Empire—Foreign Tariff Walls—To Ottawa for Cure—Swollen Interest—An Anglo-New Zealander.

Ottawa's Unique Chance.

Not only an Empire event, but a world event, will be staged when the Imperial Conference meets at Ottawa. Never before has an Imperial Conference been held in the presence of a Western world divided as to-day into gold and non-gold (mostly sterling) countries, and never has such a Conference been held in the pit of a deep depression—so deep that the pricefall has increased the annual burden of borrowers by at least 30 per cent. And although every Imperial Conference has had tariffs more or less before it, not one has seen the small States of civilisation so over-tariffed as now, and certainly none has contemplated the significant fact of the new tariff in Britain.


So many new starting points may lead to new decisions. Forced off the gold standard and free-trade, foiled in her European campaign for such tariff reductions as will give her goods a secure place in the markets of the post-war “Balkanised” Europe, and weary of trying to help trade by “temporary loans” to Greek and other defaulters, the Mother Country turns with a new mind towards the possibility of reassuring intra-Empire tariffs on a reciprocal trading basis, which may mean a planned redistribution of industries throughout the Empire, each unit specialising in what suits it. Reasoned schemes of tariff preferences no longer collide with the free-trade stone wall. Depression has so smitten both free-trade and super-tariffism that there is room for compromise.

Strategic Canada.

Geography gave the Americans half a continent in which to expand—an almost self-contained land. The States were fairly sure to remain a free-trade unit provided that they remained a political unit; and Abraham Lincoln saw to that. Result—high tariffed U.S.A. has a no-tariff home market of about 140 million people! But Geography gave Britain a far-flung Empire totally without territorial continuity, and mostly allowed to grow up in the atmosphere of its own several tariffs. If the Empire now can be brought together on a basis of low tariff—counter-balancing that great no-tariff internal market of the United States—history will contain no more picturesque page. Canada is geographically part of the American land-mass. She has felt the pull of her great U.S.A. neighbour and of the Empire. And in Canada this epochal Empire Conference is significantly to be held.

page 10

Does the Sea Unite?

It is one thing for Geography to dominate politics as hitherto in the United States. It is another thing for politics to dominate Geography. Have the English-speaking people of the British Empire the political genius to bring into closer trade relationship their geographically sundered lands—also, perhaps, India and the colonies—so as to give practical meaning to the principle that “the sea unites, it does not divide”? At a time when politics has cut Europe into high-tariffed compartments—a far cry from Briand's “United States of Europe”—have the British Dominions the will and the power to reverse the process? America, Europe, Russia—even Japan and China—are all keen spectators of this great Ottawa pageant.

Interest: Prices.

There are more things than tariffs to compromise about. There are loan burdens. The pricefall has greatly increased the amount of goods that a primary produce exporting country must send to Britain in order to pay 5 per cent. on £100 borrowed. Australian calculators say that if the British lender reduced his rate of interest to 4 per cent. he would still be receiving in commodity value a little more than when he lent the money. They suggest that if the British Government could prepare the British market for a big Treasury conversion the British Government might do likewise for Australian borrowers, particularly as the Commonwealth Government prevented one of the States from defaulting. New Zealand cannot be deaf to these remarks. Sterling developments also open new possibilities in currency.

Private Vengeance.

The assassin's hand has been active in two countries. The murder of the Japanese Premier may mean still greater demerance of the military party in Japan—with increased possibility of clash with China and Russia—but its meaning is obscure at time of writing. The assassination of President Doumer—charged by some people to Russia—may have been due to a personal freak. While no leader is safe from individual crimes, it is good to reflect that so far assassination has not been added to the sufferings that depression has caused in Britain and America. The patience of the British people in the slump years is as great an epic as their fortitude in the Great War. What ruling and governing system anywhere has stood the storm better than the British Crown and Parliament?

No Single-Tracker.

Thirty-nine years a resident of New Zealand, and thirty-six years a resident of England, William Pember Reeves died at seventy-five. He began by drafting the New Zealand labour laws of the 'nineties, and finished by being Chairman of the National Bank. He worshipped at the same time at the shrine of the Muse and of the tailoress, for while he was writing in verse “The Passing of the Forest” he was also writing Bills to limit hours in factories and shops. A mind equally at home in New Zealand and London, in the Labour Department of this country and in the London School of Economics, cannot be accused of being “a single track mind.” Owing something to law, a bit more to journalism, still more to politics, and to the economic thought which comes with years, this New Zealander walked calmly down a very varied track of life. His mind also embraced the Near East. He wrote Near East articles, was a Phil-Hellene, and wore Greek orders.

League Loans.

International finance, on which many hopes have been built, recently took on a new form through the League of Nations. It seemed that as a channel through which solvent countries (if there are any) might lend to embarrassed countries, the League might do a great work. The operation, like all other lending, was put forward as a boon to both debtor and creditor. The debtor's buying power would be released for the creditor's goods, and the debtor would pay the interest—somehow. But depression has brought an early breakdown, in that Greece has failed to pay interest on a League-sponsored loan. And now (21st May) Britain has told the League that she will page 11 guarantee no more temporary loans to States of Central and Southern Europe. Venizelos has grown tired of being a buffer between needy Greeks and the protesting Great Powers, and Athens announces his resignation.

The Credit Conundrum.

Contemporary events are not always seen in the clearest light, but it is probable that some day a wonderful book will be written dealing with various credit expedients as tested in the great depression of the years 1929——. Credit extensions in the form of time-payment systems reaching down to humble goods of the home, and (at the other end of the scale) loans to Governments who soon find themselves between the fires of default outside or civil war within, provide an unprecedented field for economic research. The whole story of how the world lent to Germany in order that Germany should repay the world (and pay “reparations”) will one day be told by a writer not excited over whether Dr. Bruening's “can't pay” is merely “won't pay.”

False Securities.

If international “temporary” loans, and the default arising therefrom, are the top story of an extended credit structure, Kreuger's bogus Government bonds are certainly the top note in forgery. When
In The Sunny Hawke's Bay Province. (Rly. Publicity photo.) Dannevirke, the centre of a rich farming district in the North Island of New Zealand.

In The Sunny Hawke's Bay Province.
(Rly. Publicity photo.) Dannevirke, the centre of a rich farming district in the North Island of New Zealand.

it is remembered that the Stock Exchange values of Kreuger companies were at one time over 200 millions, and that many millions of the securities never existed (being either forged bonds, or mere assertions of the existence of vast contracts that were never completed), it is obvious that international finance can receive blows apart from those incidental to Government default. But how is it that forged Governmental bonds and non-existent Governmental contracts can be pledged as securities without the knowledge and protest of the Government concerned?

The Pace of Things.

When modern civilisation is not counting debts it is concerned with locomotion, particularly with speed. It thrills to see a woman, Mrs. Putnam, of America, fly the North Atlantic solo in record time. It pauses a while to smile over the engagement of such highfliers as Mr. Mollison and Miss Amy Johnson—and it sighs with the disappointed Lady Diana Wellesley. George Endresy, the Hungarian Atlantic flyer who crashed and died en route to Mussolini's conference—Endresy, of “lustre to Hungary” fame!—claims a tear, and the world smiles again when it sees that the Spanish Major Franco, aviator-politician, is too Republican to accept the Duce's invitation.