The New Zealand Railways Magazine, Volume 7, Issue 4 (August 1, 1932)
Life-buoys for Debtors—Record Low Interest—Lausanne Prunes Capital—Slow America and Fast Germany—What of Ottawa?
Lowest for Thirty-five Years.
The everlasting debts problem has been energetically attacked during the month. It has been attacked at the capital end and at the interest end. First of all, the Lausanne Conference (European) achieved a rather unexpected measure of success by heavily reducing Germany's capital liability, and allowing her a breathing time of three years. Secondly, Britain, with a two per cent, bank rate (the lowest since 1897), set to work on her huge 2000 millions conversion scheme, and at time of writing almost the whole of that sum has been converted to 3 ½ per cent. stock, and the success of the conversion is triumphant. Is this not the long awaited signal that falling interest hastens to the rescue of the fallen debtor?
The Interest Barometer.
When a debtor cannot pay, and when it is inconvenient or impossible for a creditor to foreclose or distrain, a wise creditor reduces capital or interest, or both. Lausanne is an instance of one process, and the conversion campaign of the other. Though the German external liability and the British internal debt have no direct connection, they are emblematic of the compromise processes by which creditor and debtor can be brought together without compulsion and without default or repudiation. National sentiment was behind the British conversion campaign, and there must also have been some semblance of an international sentiment at Lausanne, or agreement there would not have been achieved.
Will America Veto?
Of course there are reservations. The Lausanne agreement is dependent upon ratification by the different countries represented. And their ratification of the agreement—and their carrying out of it —would be greatly helped if an unrepresented country, the United States, would agree as creditor to a reduction of debt-burden complementary to the Lausanne concessions. But although the connection between the two lots of debt is plain to view, people must be careful how they word it, lest a trans-Atlantic storm arise over “secret pacts,” “pistol to America's head,” etc. This phase followed Lausanne. But, since then, the debt-reductionists in America have been cheered by a friendly gesture from the mercurial Senator Borah.
Not even Borah, however, can altogether overthrow Presidential election tactics. The year 1932 is Presidential page 10 year; so was 1916. History shows that the United States did not enter the war till 1917 (after Woodrow Wilson had then won the Presidency and felt free to have a war policy) and it may be that United States debt policy will have to wait until either Hoover or Roosevelt is firmly in the U.S.A. saddle. If so, the full expression of the Lausanne policy may have to pause awhile, till the American oracle is prepared to speak. Meanwhile, the European pot may simmer on, or a boil-over may force America's hand. The boil-over could come in Germany. Hitlerism may be unwilling to wait till American politicalism is ready.
New Reichstag Coming.
While America is in danger of making no move for months, Germany is believed by some to be in danger of making a critical move in a matter of weeks or even days. President Hindenburg was recently referred to as a figure of destiny, one who has intrigued the world by his unique progress from Hohenzollernism to Re-publicism, from Right to Left and from Left to Right. Already some observers are completing the circle of his progress back to a restored Wilhelm III. But, unless a coup d'etat forestalls it, there will soon be a new Reichstag to be reckoned with. Will it be a deadlocked assembly of balanced forces like the Prussian Diet, and will a German dictatorship follow the Prussian dictatorship? Or will the States of Germany win back Parliamentary Government, despite the Hitlers and Von Papens? What national unity demands Hindenburg will give.
Another angle of the debt problem is tariffs. You may reduce the burden of debt by means of concessions in tariffs as well as in capital or in interest. The burden of debt owed by one country to another can be reduced if the debtor is allowed to pay in goods—that is to say, if tariff barriers are modified or abolished. The United Kingdom did not abandon this principle when it created a tariff. On the contrary, a section of pro-tariff opinion in Britain to-day supports the tariff merely or mainly as a means of lowering foreign tariffs. In other words, those tariff supporters wish to draw foreign lands into reciprocal trade, not to substitute Empire trade for foreign trade. They would say that Britain's exporting interests and creditor interests equally bind her to certain foreign countries.
Empire tariffists have a clear right to dissent from that opinion, but it is impossible for them to ignore it. At any rate, it has emerged clearly enough from the Ottawa deliberations. Amid the Babel of rumours and advocacies, there is a middle body of opinion which says: “Get from generalities down to details, and find out what commodities (U.K. exports or exports of Dominion or colony) can be encouraged by tariff reciprocity without further impoverishing British workers, ruining valid Dominion industries, or imperilling British loans to foreign countries that pay in food and raw materials.” Is there room for such “scientific” adjustments, and can that be demonstrated by spade-work in committee? It must not be forgotten that the British Government includes men like Lord Snowden and Mr. Ramsay MacDonald.
Lessons of Raiding.
In the late Count Felix von Luckner, the German naval spirit has something to counter the memory of Scapa Flow. Von Luckner's Seeadler was the farthest-ranging of the German raiders, and mined even the coasts of the Antipodes; and though he ended the war in captivity in New Zealand, his record was such as to eminently fit him to take part in the rebuilding of Germany's navy by leading, in a training ship, “the flower of German youth.” It is one of the tricks of fate that so adventurous a war voyager should die in a time of peace, with many of his lads, through a mere storm in the Baltic. But his memory will remain green in German naval annals. And it shows why, under disarmament, Britain requires a larger number of smaller cruisers rather than a smaller number of larger. The Seven Seas need a large number of police units when raiders are so hard to find.
Monarchs in Exile.
Democracy is not everywhere sufficient, and in various parts of Europe there are ex-Monarchs who wait—more or less hopefully —for thrones to return to them. The world has a very real concern in what happens to the exile at Doorn, for German Hohenzol-lernism might possibly precipitate another conflagration; but the world's interest in some of the other thrones is mainly romantic. Carol, on and off Rumania's, has been a subject for the moving picture gazettes, and they also like to give snaps of Alfonso waiting calmly until the unrepublican Spaniards grow sick of the Republic. Wilhelm III. and Alfonso typify hope deferred.
A Test of Culture.
Nature love, and the study of birds in particular, are receiving a good deal of publicity in England, even in the daily press. There is an increasing tendency to regard bird-consciousness as one of the evidences of national culture. In the past, and even in the present, birds have had a bad time in some Mediterranean countries, and bird-slaughter there, being along the line of migration, has adversely affected the avi-fauna in other countries. Books have been written on it, and lately a Manchester Guardian writer condemned Italian inhospitality to wild birds. At the same time, he concedes that even Italy has many sanctuaries, such as Franciscan convents. Grape-growers who kill grape-picking birds give a premium to grape-destroying insects that birds would devour. Thus the case for the birds is material as well as cultural.page break
“Sweet new blossoms of humanity.”-Gerald Massey.
Our Children's Gallery.-(1)Dean Swift (Wellington); (2)Norma, Shirley and Douglas Croft (Ngaio); (3) Clive Ian Lee (Miramar); (4) (5) (6) (7) Elaine, Desmond, Roland and Audrey Hendry (Cust); (8)Norman Tomlinson (Whangamomona); (9) Keith Woods (Wadestown); (10)Russell, Ian and Jim Shaw (Musselborough); (11)Dorothy Neill (Westport).