Small Lenders—And Piratical Borrowers—Revived Coalmining.

Merely Debt!

Many causes have been alleged of the world depression. After all, is our principal cause simply the old folly of borrowing (or lending) too much? Sir Arthur Samuel says bluntly, “Yes.” He states that “unjustifiable debts incurred by uncreditworthy borrowers are the principal case of the partial collapse of the world's economic structure.” In a simpler form of society an excess of borrowing used to be checked in good time by the lender, who put the brake on. Nowadays lenders are legion, and, being competitive, and often ignorant, don't seem to know how to put on the brake. If they did, would it be necessary for Sir Arthur Samuel to declare it a duty of the Government “to check indiscriminate public lending and protect investors’ savings”? Sir George Paish points out that the savings of small people now form a huge proportion of lendable capital. These small people are not usurers to be repressed, but persons to be protected in their capital and in the moderate return it brings them. Capital losses on loans are now colossal.

American Experiment.

Since international stabilisation of currencies was postponed, pending the result of individual attempts at stabilisation by different countries, economic attention has centred on the American experiment, as being the greatest for many reasons, including: (1) The immense size of the untariffed home market; (2) the lesser degree of dependence on exports; and (3) the novel methods of control of wages and hours and (in some cases) of production and price. That experiment is altogether incomplete. It is the greatest of its kind the world has seen. While the United States depends less on exports than does Great Britain, her agriculturists must necessarily feel the tariff tactics of the gold countries. France and Italy are both reported as raising their tariffs against countries with depreciated currencies. Sterling as well as the dollar is concerned in this.

Armaments Race.

The naval holiday promises to come to an end even more emphatically than the tariff truce, but it seems that another effort may be made to save the disarmament cause on sea and land. A British proposal to President Roosevelt to postpone his naval programme is reported by the “Daily Mail.” American pleas that the programme is needed in order to give employment have not prevented the rival culmination of a bigger navy movement in Japan, where dictatorship and a huge Budget deficit are talked of. America's own Budget deficit will take some beating. A Federal surplus of 183 million dollars in 1930 became, in 1933, an accumulated deficit of 5,547 million dollars. President Roosevelt's new naval programme totals 47 millions sterling.

Oil from Coal.

By means of an investment of several millions sterling at Billingham-on-Tees, Imperial Chemical Industries will produce, oil-from-coal at a rate calculated to keep a good-sized coalmine busy. It is estimated that petrol will be produced at a cost of about 7d. a gallon. Imported petrol has been brought to the mouth of the Thames at a cost of as low as 3 ½d. a gallon (that it, cost without duty), so the British Government guarantees to maintain for a period of years a duty of at least 4d. a gallon net against the import. It is not certain that imported petrol will continue to be as cheap as 3 ½d., or that petrol-from-coal will continue to cost as much as 7d. Practical operation may reduce the 7d., and it may be that oil-from-coal will reach as low a cost basis as imported petrol. In that case, the new petrol will not live merely by the duty. It represents home industry (including revived coalmining) and home production of fuel vital to the Navy.

A Coke Process Also.

The Billingham-on-Tees undertaking is based on the process of hydrogenation. Another well-known coal-cracking process is low temperature carbonisation. Both are highly technical and are still developing. To the layman. a conspicuous point of differentiation is that the hydrogenation process of coal-cracking has for its main product the petrol referred to above; while the carbonisation process has for its main product a smokeless coke, with oil and petrol as secondary products. Experts have pointed out that if the smokeless coke of carbonisation could capture practically the whole household fuel consumption of Britain (for which it is well suited) then the secondary product oils might be produced in sufficient quantity to make Britain independent of petrol and oil imports. Instead of building on that “if,” Imperial Chemical Industries rely on the petrol process—that is, on hydrogenation. At the same time, the smokeless coke of carbonisation, if burned in grates, would mean a less polluted atmosphere.