Evening star., 1933-10-22

capital liabilities beyond it's earning ca
pacity will write of its losses and put
the company into sound position. That
Is the alternative to bankruptcy. Dis
agreeable as it may be, there will have
to be the writing down of great volume
of international indebtedness. That is
the alternative to the full reputation of
these debts. The debtor countries cannot
carry these liabilities in their impover-
ished financial position, for their debts
are not now backed by assets. If relieved
Of a portion of this Indebtedness they
will have resources set free which they
can employ to build up their industries.
This drastic step of reducing liabili-
ties will have to be applied not only to
public debts, but to commercial and
industrial concerns where much of the
liabilities are irrecoverable. It will be
no loss to the creditors. The money is
already lost, and it is better for the
creditor to save something from the
wreck than to lose it all, especially when
the debtor relieved of part of his liabili-
ties, may become again profitable GUS
toner to his creditor.
OTHER and more difficult measures
will have to be taken to restore
world trade The experience of the World
Monetary Conference has shown how
difficult it is to get the nations to
agree upon steps which will have to
be taken to set world trade going. Most
of the problems which engaged the con-
Sideration of the conference were not
fundamental, but only effects of the
primary cause.
The national policy of every country
has been to build up national industries
behind high tariff walls. If country
will not buy from other countries it
cannot sell to them. Tariffs have chOked
the channels of world commerce. This
has brought about other evils such as
erratic exchanges, the prohibition of
the export of currency and the restric-
ton of foreign lending There is little
prospect of revival of world trade until
tariffs are substantially reduced
A national tariff policy has been
adopted in the belief that it brings
benefits to the trade of the country.
No one denies that tariffs may benefit
a particular industry, but the advantage
is gained at the expense of other indus
tries. There was a Scotsman lying i'll
in a hospital ward. He said that he
could die happy if he could hear the
bagpipeS play once more. A piper was
brought into the ward and the music
had such an effect on the Scotsman that
he got quite well. And every other pa
tient died.
We all recognize the difficulty of get
ting tariffs down. In most countries in
dustries have been established under the
protection of tariffs which are not eff
cient and cannot exist in free competi-
ton with the highly efficient and well
organized industries of the older manu-
featuring countries. Tariffs create vested
interests which fight to preserve them.
Moreover, as the whole economic system
of protectionist countries is based on
tariffs, if these were suddenly abandoned
the whole of their industries would be
dislocated. While every country realizes
the evils of tariffs, it is recognized that
their immediate abolition is impractical.
1ue CudHSe muSI Ue SIduudi 81 DIS W
give time for the trade and industries
of country to adapt themselves to the
new conditions But if all countries were
to begin to make determined effort to
reduce tariffs feeling of confidence
would be created and this would give a
stimulus to trade.
The folly of mankind has brought the
world to it's present parlous state. Ma
tions and individuals may be bankrupt,
but the world is rich in resources and
possibilities. There are resources of
natural wealth, of science and of skill