The Debt Chain—Rival Links—“Commercial” Compromise—“Scotland is a Spirit”—Separate—Yet One!

“Reparations and inter-Governmental debts are separate and distinct subjects,” said the President of the United States Chamber of Commerce, on 21st January. In so saying, he implied that if Germany carried out Dr. Bruening's New Year threat not to pay reparations to the European and British Empire countries receiving reparations, the United States Government would not necessarily regard those reparation-denied Governments as being entitled to corresponding (or any) reductions in their debt burdens to the United States. Although the parallel is imperfect, let us liken the United States to the mortgagee of a house property, France to the mortgagor-owner, Germany to the tenant. France hears that the tenant Germany is not going to pay the rent, but mortgagee America expresses complete unconcern, and says that interest and rent “are separate and distinct subjects.” So they are, but in practice one knows that if the rent stops, the interest may stop too. And it may be unwise to foreclose!

Germany's “Can't Pay.”

Dr. Bruening's “Germany cannot pay reparations” statement prevented the Lausanne Conference being held in January. If Germany had merely asked for time, France might have been persuaded at that conference, by Britain and others, to grant Germany a moratorium of six months or a year in respect of reparations. But the blunt “can't pay” has for the moment deprived the French (Laval) Government of moratorium enthusiasm. The “can't pay” of Germany at the debtor end, and the “can't reduce” of America at the creditor end, have irritated France. And some of this irritation has displayed itself against the claims of the “commercial” short-term creditors of Germany. These “commercial” creditors are largely British and American banks. They supplied Germany with trading finance, as distinct from long-term obligations. Last year they gave Germany a six months' extension of credit.

Inter-locking Debts.

This 1931 credit-extension (“standstill”) agreement (“commercial” debts) was due to expire in February, 1932. The Hoover moratorium expires in July, 1932. During December, France emphasised the priority of reparation annuities (beginning to be due in July after the expiry of the Hoover moratorium) over the “commercial debts.” In Britain, the reply was made that the “commercial debts” are part of the working foundation on page 10 which the reparation payments themselves are based. The “commercial debts” represent the financing of German trade; no financing, no trade; and no trade, no reparation payments. France was represented as kicking at her own ladder if she drove out the “commercial” finance. It would be not unlike a combined attack by the first mortgagees of New Zealand farms upon the essential short term finance of those farms.

A Year's Grace.

At time of writing, France has made no overt sign of compromise, but the “commercial creditors” are reported to have extended the credit-extension (“standstill”) agreement for a year. If so, this will be the first substantial step in 1932 to a substantial creditor-compromise. Will Germany receive, with regard to reparations, as much consideration as is proposed in connection with the “commercial debts”? This intricate question has been stated at some length, because the world's principal (though not only) malady is debt. Debt is paralysing trade. The new “commercial” credit extension covers about 268 millions, owed by Germany. But it is only a part of the world's debt burden, of which New Zealand, like other countries, is a victim.

A Classical Wheel-barrow.

Entertained by South of the Border Scots on Nov. 26, Prime Minister Ramsay MacDonald declared “Scotland is a spirit.” There was certainly, in the Scotland of his youth, a spirit of education perhaps found nowhere else. An old barrow-man in the streets of Lossiemouth nails on to his barrow a piece of wood on which to rest a book, and as he walks behind the barrow, and as his lips chant “Rags and Bones,” his mind is busy with Latin and Greek. Seeing young Mac-Donald with a book, the barrowman says: “Are you interested in these things? Then, tak' that.” And he gives the youth a translation of Herodotus. Up the street marches a chanter of “Rags and Bones,” and down the street walks a future Prime Minister. Where, outside of Scotland, would you beat it?

Clash in India.

Lord Irwin, who worked so strenuously for a round table settlement of the Indian problem, in his first utterance in the House of Lords in mid-December, held that such a settlement “had been immeasurably advanced by making India the joint architect of its own constitution.” But within a few weeks Gandhi and the Indian Congress had turned from architecture to civil disobedience. Arrests followed. The war between Government and the passive disobedience of Government is now on. But it is not always passive. On December 14, about the time of the House of Lords debate, the District Magistrate of Comilla was shot. He was shot by two Bengali women. This seems to herald the intervention of Indian women in Indian resistance. They will recall the passive resistance to the English education rate by free churchmen a quarter of a century ago, and the London suffragettes. To meet them, the Indian Government may enrol women police.

Stamp Portraiture.

All sorts of queer stamps have been produced, and it may be that in stamps there is nothing new under the sun, but the last Newfoundland issue contains some features that, to a mere layman, appear novel. New Zealand has hitherto been content with the King, but the Newfoundland new six cents (dark blue) carries “the first stamp portrait of Princess Elizabeth.” Stamp portraiture would seem to have untapped material in the Royal family, and still more untapped material in Nature. A stamp-issuing authority that seeks to catalogue the fauna and flora of the country might meet with executive difficulties, but Newfoundland, in its new issue, shows a caribou (five cents, violet), a salmon leaping falls, (ten cents, orange), and a baby seal (fifteen cents, ultramarine). Other denominations show a fishing fleet and a sealing page 11 fleet. And, of course, there is the Newfoundland Dog.

Colour Photography.

“The genuinely coloured newspaper has not yet become a daily, or even a weekly, addition to the breakfast table.” This is the finding of a British weekly that recently published a de luxe issue adorned with direct colour photography (meaning photography of moving objects in natural colours with single-exposure cameras). It does not say that the adaptation of weekly or daily prints to colour work is “just around the corner,” but the effort it has just made implies a belief that the movement in that direction is not slow. Colour has been knocking at the door of the newspaper, and the moving picture long enough; its occasional entry should eventually lead to a wider opening of the door. Whether the future lies with a number of small improvements, or one big invention, is not clear. Inventors are busy, even in New Zealand.

The Shadow of Hitler.

By the aid of the talking picture, the world's leaders are becoming known at the

Wellington's Big Reclamation Work.
(Rly. Publicity photo.)
A recent view of the reclamation work in progress at Thorndon in preparation for the provision of improved railway terminal facilities at Wellington. The Wellington Harbour Board's Floating Dock is shewn in the foreground.

outermost corners of the world. You almost see them in the flesh—Hoover, Mac-Donald, Hindenberg, Laval, Mussolini. In the German pictures is beginning to appear another figure—Hitler. Authorities differ as to his natural stature. Some of the French critics say he is a paper despot whom Germany parades as a threat to France. “Compromise with Bruening, lest you find a worse customer in Hitler,” Germany is supposed to be saying to France; and, the French critics declare it is all bluff. But there are other authorities who hold that Hitler and his German brand of Fascism constitute a real force; no one need be in doubt on that point, they say, and Bruening isn't. If Hitler got a chance to begin tearing up the Versailles Treaty, a lot of things could happen. Sir Robert Borden says that the next six months are the most critical in history.

A thousand years scarce serve to form a state; an hour may lay it in the dust.—Lord Byron.

Track Improvements by Deviation.
Deviations on the North Island Main Trunk Line, N.Z. (Left) Tawa Flat deviation, under construction; (right) Westfield deviation, completed.