The New Zealand Railways Magazine, Volume 5, Issue 7 (December 1, 1930)
America's Gold—Does it Kill Trade?—Debts Dilemma Universal—Busy Italian Cradles—Feverish Transport—The Search for the Best Yet.
The Burden of Debt.
The central problem of the world today can be summed up in the little word of four letters, “debt.” It is the oldest and the newest of world-problems. Its post-war development is stupendous. Pre-war economists would never have admitted that such debts could be. And yet they are. Writing about five years ago, after the decay of the “Reconstruction” hopes of 1918–20, H. G. Wells (in The World of William Clissold) philosophised on the open wound that debts represent in the body of society. The wound is still unhealed. Hitherto the ultimate creditor, the United States, has been represented as implacable. But a new note was sounded on 20th October by the Washington correspondent of The Times. He stated that the United States Treasury and banking leaders were “discussing a draft plan for a possible moratorium on the Allied debt payments to U.S.A.”
Increased Real Debt.
Falling prices (accompanying the return to the gold basis) have increased the burden on debtor countries, and the ultimate debtor, Germany, bears the full brunt of this. Consequently, in the cabled speculations, Germany's demand for relief is bracketed with the suggestion that the United States should grant such relief. The Americans and the Germans are at either end of the chain. Britain is in the middle, as a debtor-creditor country. France, it is cabled, will look to America for relief proportionate to any German relief. France is one of the few European countries reported as being without unemployment; the others are Norway, Sweden, and Denmark. Germany is reported to have considerably more unemployed than Britain has. Owing to price-falls, Germany's reduced (Young) debt is at the moment a heavier real debt than her larger (Dawes) debt used to be.
Gold and Unemployment.
Another pertinent fact about debts is that Germany and France have both, by deflation of their currencies, made wholesale reductions in their internal indebtedness. These European internal liquidations are still so recent and immense that the world has hardly grasped them, and has not yet read their meaning for the future of civilisation. Equally complex are the pros and cons of the tremendous aggregation of gold in the United States. But mark the comment of the London Daily Telegraph that United States banking opinion may have at last concluded that the flood of gold to U.S.A. is prevent- page 18 ing impoverished Europe from buying American goods—hence American unemployment!
Hoover's Anti-Hunger Plans.
Memory goes back a quarter of a century to Mr. W. J. Bryan's metaphorical statement that the world is “crucified on a cross of gold.” Like his silver coinage campaign, and his silver voice, that figure of speech of the great Democratic orator is forgotten. There is little oratory in political economics to-day. No one could be less like Bryan than is President Hoover, now facing the second depression winter of the United States. The Hoover plan for dealing with unemployment is the plain and prosaic plan of finding money to find work. His statement of 17th October does not gild the pill. He seeks to strengthen “Federal activities for employment” in order to “prevent hunger and cold” this coming American winter. He says nothing about that glut of gold.
Debts and Armaments.
Not less interesting than the expressions of the Washington correspondent of The Times is a subsequent presentation of the French standpoint by the Paris “special” of the Daily Express, who says that France apprehends that the United States will not grant her a moratorium without attaching a condition that money not paid to U.S.A. must not be expended on French armaments. Thus a pull on the economic string sets in motion the disarmament Punch and Judy. French armaments hinge on Italian, and the whole Geneva problem reappears. Italy is not one of the fully employed countries —far from it. And the Italian excess of births over deaths for the first nine months of 1930 was 388,394, compared with 266,282 in the corresponding period of 1929.
Air Future of Gas.
“Death is swallowed up in victory,” and from a national point of view this is true of the forty-odd victims of R101, for as pioneers of progress they can claim that the little bit of France they died on is as glorious as any that was consecrated by the Great War. But whether their victory is to have a commercial expression is now uncertain. All the old criticism of the practicability of the airship has been revived, and no one knows whether, when the big inquiry has reported, the policy of working towards commercial airship services will be continued or not. Air lines to India are fairly secure with the growing adaptability of heavier-than-air machines. Will the British Government, with national persistence, press on the airship campaign, or leave it to Germany and Dr. Eckener?
Flying in the wake of R101, Kingsford Smith created a new England-Australian aeroplane record. He did this notwithstanding the loss of a considerable number of hours in sportsmanlike attendance on a crashed competitor, Hill. Kingsford Smith chivalrously said that though Hill failed at Australia's front door, Hill's performance, allowing for all circumstances, was more meritorious than his own. Equally generous is Kingsford Smith's tribute to the victims of R101, photographs of the wreckage of which he carried with him to the Sydney press. But he has no faith in “gasbags.”
Capital in Transport.
Although it seems that really self-de-pendent civil flying services are few or non-existent, flying continues to extend on a subsidy basis, and Imperial Airways Ltd., “for subsidies for two years of £940,000,” will have aeroplanes early in 1931 flying on the African wing of its Eastern service. Of the £940,000 required for this Cairo-Cape venture, Britain is to contribute £270,000, and “the remainder is recoverable from the Governments through whose territory the service passes.” Thus will be created a new pawn in the great game of chess called transport. At the same time South Africa proposes to bridge the Zambesi at a cost of nearly a million and a half, which is quite modest compared with Sydney's harbour bridge. Although many land and sea services have ceased to pay, and flying has never yet paid, capital still pours into transport. Lloyd's figures indicate more shipbuilding than ever.
The over-production alleged to exist in commodities is certainly capable of being attained in transport machinery, but the continual exploitation of new competitive forms (example, the motorship in sea trade) seems to be capable of luring capital into constantly expanding efforts to construct “the best yet.” The spirit of innovation is almost as feverish on land and sea as in the air. The speed urge and the military urge are insatiable. In mechanisation the British Army, which staged a show for the Imperial Conference delegates on 18th October, claims to lead the world. Propaganda for British motor vehicles—now bent on recapturing Dominion markets—includes a claim that British speed machines on land (Golden Arrow), on water (Miss England), and in the air (Schneider Cup), symbolise the regained ascendancy of British manufacture.
The great name of the late Lord Balfour is associated with Zionist Palestine just as much as it is with the debts question discussed above. Lord Balfour created for Britain a lofty ideal of trusteeship, and it is not easy to live up to, as between Jew and Arab. In these days political freedom means nothing unless it has full economic expression; and when the British Government declares that Jewish settlements and reservations of land leave for the Arabs insufficient land to maintain them—having regard to “present methods of Arab cultivation”—a grave impasse is indicated. “The Jewish settlers have every advantage of capital, science, and organisation.” The Arabs have little save a high birth rate. The Jew measures up more closely to criteria of progress and claims liberty to grow. But can he afford to have a sullen Arab populace?page break