Saturday,
HONGKONG TELEGRAPH
June 1, 1940.
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Thongkong Telegraph.
Saturday, June 1, 1940, Wyndham St., Hongkong Telephone: 20016
THE preax "Special to the Telegraph" ja used by the Hongkong Telegraph" to tadicate nows which is stiletly copyright under the provisions of the Telecom -
ALL THE
IN my young days, invest- ment banking business took up all my energies and gave me plenty of satisfac- tion-and some monetary advantages, too.
In fact, in ten years, in- vestment banking business in Canada brought me a good revenue.
It was my occupation to provide others with invest- ments for their money.
WE
MONEY NEED
-By LORD BEAVERBROOK
THE gold of the world in South Africa, the rubber is nearly all centred in plantations in Malaya, the tea Those who followed my ad- one country, the United States. and coffee plantations in India, vice made profits. After On that account, it is a peculiar Ceylon, and East Africa, the a time, many of those inves- and special token of the Ameri- oilseed enterprises in West tors accepted my judgment can people. It is no longer a Africa, and the plantations in almost, blindly.
universal medium of monetary the West Indies. expression at all.
Buy British securitica,
Here let it be anld that all these properties scattered over the Empire belong to the people.
Increases in that Debt can be. derived from :---
(1) Savings of the people. (2) Repatriation of credit- balances of British citizens from foreign countries.
(3) Conversion of other in- vestments into. Government
securities.
(4) Extension of business activities.
(5) Increase of the Na- tional Income,
from
(6) Investments foreign sources.". Now, after an interval of
None of these expedients thirty years, I am returning Even in the last war some of Britain, who have paid for necessarily involves inflation. again to my old occupation. I countrics refused to accept gold the exploitation and develop. It is, however, in an examina- am giving a piece of advice to in exchange for goods, Cer- ment of these vast concerns. foreigners about the wise in- tainly in this war that experience
tion of the Budgets of the The assets were created by United States and Britain that vestment of money. And this will be repeated.
British people. They do not we discern a condition which time it is free.
represent spoliation or conquest, gives us Next comes silver.
the right to claim n Energy and enterprise created healthy state of finances in this Buy the shares and deben-
The United States holds at them.
country. tures of all the great industrial least 90 per cent. of the world's enterprises, the public utility visible supply. About £300 undertakings, and also the con- millions was the total value in cerns engaged-in-distribution:December 1939, at the current- These assets_are_in_part_ro. War for seven months,the-ex- Buy with depreciated pounds, market valuation of the Ameri- presented by the figure already cess of expenditure over income Now is the time. This is the can silver holdings." This in- given for foreign Investments, amounted to £768 millions. opportunity. British credit is creases the precious metal ax- But there is a further value in But the United States déficit not good abroad. It will be sets of the country to £4,800 these properties not represented for the year ending June 1939 better. So buy before the im- millions.
by share capital. It should be was just under £900 millions. provement takes place.
put at 2500 millions.
and it has been estimated* that Of course, the silver is over-
in June 1940 it will be nearly The United States holdings of £1,000 millions. BRITISH citizens should valued owing to American pur
note that this advice fall very rapidly, perhaps to
chases. And the price would this type are limited.
So here is
cations Ordinance, 1916. Such news which I offer does not apply to one-half of the value placed on sheet:-
residents in this country. It is the metal by the American confined to capitalists elsewhere
Dents the indicatión “US" is received in Hongkong on the date of publication by the Unijed Prek Associations, who re serve all rights and forbid republication,
The Lowlands
the
balance-
America
Millions £4,800 £1,700
2
Total £6,500
Britain
Precious metals .....
frangerely or in part without previous who have the opportunity of Government, if the American
Precious metals buying on the basis of depreci- purchases were to cease, ated money.
Investments abroad.. Although opinions vary about Cash. abroad Now that I have given the the value of gold, it. will hardly advice to buy British securi- be denied that silver is no ties, I must make good an argu- longer an easy and convenient ment.
medium for carrying on inter- national transactions.
The capitulation of King Leopold and the withdrawal of the Ailled forces from Flanders leaves the Nazis in undisputed possession of the Low- londs, so that shortly they will have continuous North Sea coastline stretching from Calais in the south to Bergen in the north.
41
The reason that I recommend British accurities is that Britain is in us strong a position finan- cially as the United States.
I CONCEDE, however, at
the outset £1,800 millions Investments abroad of precious metals us an asset Cash abroad : That is a startling declara- of real value possessed by the Other assets tion. And there will be many United States, with no similar Low complaints and some criticism store in this country to offset
on account of it. But here are it. the facts.
The spectacle of ruthless invasion presented by the series of photographs published elsewhere in this issue, of the "Telegraph" Is intolerable to all sensitive minds.
For the Countries represent in a special degree the significant achievements of Europe in polities and culture. In the Flemish towns ercated a civilisa- the great days of mediaeval culture tion comparable with the glories of the Italian cities. This chapter of brilliant success was followed by two
others. For whereas the City States
Millions
£500 £3,700
£190
£500 -
Total £4,890
In the year ending March 1940, after Britain had been at
Thus it is evident that:-- (1) In a year of peace and war Britain has carried on the national expenditure with a de- ficit less than that existing in the United States in a year of peace.
(2) The National Debt of Britain, although heavier than the Debt of the United States, is not unnecessarily burdensome. And it can be largely ex- panded before reaching gross figures comparable with those of the United States,
(3) Though we have no such store of gold and silver, there are other assets and valuable The difference is thus £1,810 Properties and possessions in the Empire and elsewhere, fully-de- millions in favour of the United veloped and carning large sums, States has enormous stocks of the United States and Britain advantage considering the im- much less in value and certain- Then there are the assets of States, which is not an undue which constitute an offset not gold.
owned abroad in the form of mense population of the Ameri- ly more desirable on account of Taking all values at four bonds and shares in overseas can Republic. dollars to the pound, which I companies.
their large earning power,
It is true that the United
States before the war is over.
But some persons say that
on
IT is these rough
succumbed in Germany to the Ger- am doing for convenience in man princes and In Flanders to the making this argument, the Britain has £3,700 millions of Now we come to consider Burgundian princes, the Dutch United States has over £4,500 these foreign investments. This
the other side of the succeeded, like the Swiss and unlike
balance-sheets that I the Italians, in welding a number of millions of gold.
sum compares most favourably ledger. The liabilities.
contend that the-Investment-of- City States into a larger common-
on Britain at the outbreak of with the total of $1,700 millionst wealth, becoming a school of liberty--war-had-£500 millions.And-representing American-foreign United States amounts in round will constitute as safe a haven, The National Debt of the foreign money in Britain to-day for Europe. As the Swiss were all of that will go to the United investments. sheltered by their mountains, they
figures to £11,000 millions. The with as were sheltered by their dykes. Lastly,
good a prospect of by the accident of their geographical
The £3,700 millions invest- Debt of Britain is £8,000 mil security and as admirable an opportunity for participation in position the Dutch were able to take the possession of gold is not ments abroad held by Great lions.
earning power, as can be found a lending part in the development of any longer a reliable token of Britain represent some assets But the two debts are not in the United States or any covery of the Atlantic routes and thus great financial strength. If it not easily liquidated. But the comparable, for the State and other country in told. to draw into their life the spirit of is to serve as an international values are limited to securities municipal debts of the United adventure and the new and bold ideas counter, gold must be distri- of Joint Stock Companies, States must be added to the The capacity to make war for that inspired the mind and taste of buted among all the nations, in whereas the £1.700 millions held amount of the National Debt in long, without destroying the brend the Renaissance. Rem- order to form the basis of in- by the U.S.A. represent all of that country.
financial structure, is establish- ed by this investigation and in- Further, the foreign invest- debts are believed to amount to
These State and municipal quiry. ments of the United States in- as much as £5,000 millions,* The present deficit on public income and expenditure must be more than £1,000 millions yearly for some time to come.
the New World created by the dis-
tain.
Such a drain on the national of £16,000 millions, resources can be sustained for millions In many years. Perhaps for a de-
cade.t
brandt, like Shakespeare, moved be- neath the wide spaces of these new ternational settlements for the their assets abroad. ho, izons. Thus the two peoples who future. are now fighting for. their liberty against an enemy who practises every form treachery and cruelty in his
* Federal Reserve Board Bul- clude £625 millions in British against $1,200 millions in Bri- onslaught on civilisation
countries, possess Ictin.
£35 millions traditions thut represent more richly
in than German history the intense and
France, and 256 millions in Ger-. Imaginative phases of the life of served the cause of Uberly in another many not easily dealt with at We have, therefore, a total Europe in their vivid colours and manner. They have
National Debt in the United brought to present. their creative energies...
States modern pollites the best qualities of In two respects these peoples have that elty life which stirred the
We may estimate, in fact, against £9,200 given noble service to the cause of imagination of the Middle Ages and that the advantage to Britain Britain... liberty. The struggle of the Dutch the Renaissance. They have built in this sphere is £2,000 millions, with the Spanish Habsburg Power up communities in which democratic to offset the immense American from A.D. 1572 to 1600, with the self-government is respected As an famous sieges Leyden, is one of the great epics of in the eight rentury Britain metals,
of Haarlem
and ideal and pract
as a mode of life. advantage
precious
The population of the United Now I must not be regarded history. A century Inter
their learnt from the Dutch the
States is nearly three times as a counting too much valour was a decisive element in the bankding; they learnt, what was per- Britain has also large assets big as Britain's. But the Na- material things of this world. I long war of resistance to the
haps
well aware
of the moral of in cash abroad. The Federal tional Debt of America is just of Louis XIV. Thal gallant effort
or tolerance. No greater contrast in-
issues. col them dear, for it was this great deed can be found than that between Reserve Board estimates that under twice the amount owing
But the wealth that has been na a Great Power. After breakut life that and expression in the Nazi United States at the beginning It will be seen, then, that on tune that has attended our Im exertion that sapped their strength the ruthless and savage notions of British dollar balances in the by Britain.
showered oni us, the good for- away from their Spanish masters system and the principles of mutual of the war amounted to £150 the Dutch had made themselves respect and civiilsed discussion by millions, and our cash balances a per capita basis the citizens perial development, the
which these people live and govern in Canada amount to as much of enterprise
the United
States carry 4 resourcce that have fallen to our- finance, and themselves, in none of the battles
by their skill and
one
In seamanship, trado
ambition
the
art of
more important, the art
in the
חזם
on the
vast
of the leading States of the past have the people of the 38 £40 millions, including money heavy burden indeed, although keeping must all bò regarded as of Europe. They had ousted
Netherlands had to resist a power so held by the British Government not so heavy as that borne by an instrument for good.. Portuguese from their settlements in or making war or its method of gov dent in the United Kingdom. Indio, Africa, and the Spice Islands, ernment. Well may the commenta-The cash balances of the United
ericl or so barbarous in its method and by persons ordinarily resi a British citizen. established themselves in America, tors in the United States observe and drawn on themselves the envious that the fate of the western hemi-States abroad are negligible. eyen of their neighbours. One of those neighbours had a great advan spiere la involved in this grim and tage. Britain. O nn island,
desperate struggle. could Louis XIV or Napoleon would have
It is in the use of this instru TAKING other considera- ment to the fullest extent and tions into account, how with the finest measure of ever, it is apparent that the Debt sound judgment and wise direc
can carry.
Estimate of National City
Philip 11 or NOW we come to another in this country in comparison tion that we will hand on our detach herself from the European been a tolerable and beneficent ruler where Britain holds a big ad. burden beyond that which we lion. continent. Holland, ilke Athens, had for Europe in comparison with this
type of possession with the United States is not a inheritance to the rising genera every
cquipment, for except this. For lack of that advan- once ruled by Napoleon where life
sea-power now tyranny. There were places vantage.
"If we command our wealth, tage. she fell behind in the fierce and memory was cherished almost with
In fact, I am convinced, along we shall be rich and free." strenuous rivalries oxcited by the gratitude and. affection. A
That is the value of the gold with other men of experience, New World. Her relative weakness ruled by the Gertops, kept in awe by India, the copper mines in Rho- imense increase in the National
world mines in Africa, Australia and that we can sustain an im why reflected in the diplomacy and murder and torture, infested by spies desia, the tin mines. In Malaya Debt of Britain, and of the Bank of New York. the treaty that ended the war with and informere, where no man there was even less those days spenic his bold mind or pursue his and Nigeria, the diamond mines United States also, without giv
chivalry than at nights of generous fancy, where nil other times between Great Powers, the natural instincts and motives of and the Dutch had to pay, when the friendship or kinship are corrupted trenty was made, for the strain that and exploited by the cruelty of rulers, York Bulletin.
* National City Bank of Nerv long struggle had put on their re- where Barvillty and sycophanty
Both Holland and Dolglum have is the world the Nazi will impose, turns.
are fostered and rewarded-such
† United States Treasury Re-
sources.
ing rise to any vast inflation on that account.
tIt is comforting to reflect that 57 per cent, of our expen diture for the year ending March 31, 1940, was discharged by tax revenue, whereas in the last war. "The Index," published. by only 28 per cent. of expendi Now York Trust Company. turo was raised by taxes.