1936-04-27 — Page 18

6

THE HONGKONG TE LEGRAPH, MONDAY, APRIL 27, 1936.

DEWARS

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Johnny Johnson & His Orchestra I FEEL LIKE A FEATHER IN THE BREEZE-Fox Trot

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The SAD TALE of the LIRA

I

ORD CROMER once said N December 27, 1927, the Ura was re-fixed in its foreign ex- that there was always change value after its wartime The keypoint in any situation no and postwar depreciation.

new rate was 100 to the . But matter how confusing. in the provlous two years its un- Sir Samuel Hoare, when xed value had oscillated between 75 Foreign Minister, fixed upon and 89. Thus It was valued above such a keypoint for the Then, in 1929, the lira ran into Italo-Ethiopian war.

its natural exchange rate.

the world erisis. Other currencies

exchange

The lira, however, remained

After saying that, in the were pulled down in their foreign equivalent. even the opinion of the British Go- fordly pound and the almighty vernment, the root cause of dellav, the conflict was çconimic, he constant. Hence the lira has shot proceeded to lay emphasis on up in value by the very fnet that the need for unfettered the £ has shot down. How high this position Is may be judged to the world's raw access

which from the following table showing of many materials,

of world currencies the discount have been subject to monopolis- from their 1931 levels: tie handling.

Probably this is the keypoint, but there are several other

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The

Hongkong Telegraph.

MONDAY, APR. 27, 1988,

IS AIR DEFENCE FUTILE?

Great Britain

United States Japan

italy

*

*

P.C.

-10

10

05

3

for Italy's adventure, such as its vain search for economic self- PRESTIGE mainly accounts for. sufficiency, its natural and purpose. the desperate maintenance of ful over-population, world tariflism the lira on its high perch. În n and its own currency policy. This speech on August 18, 1926, Signor latter factor does not often get Mussolini adumbrated the stabilisa- Consequently, there tion of the lira. The announce attention. might be the interest in examin- ment was of such importance that it is known as the Pesaro Declara- ing it.

:tion,

NOTES OF THE DAY

tasks.

2:

*

the Italo-Ethiopian

*

WILA

*

*

WAY wels

THE STOCK EXCHANGE IN ROME Built in the Ruins of the Old Neptune Triple at a Time When Homan Antiquitie Received No Special Consideration, the Battle Senrred Structure is Enduring the Sitnes and Arrows of Pinancial-fleischte Affecting the Exchange of the Iden

HERE

By H. B. Elliston

was this much to be said TTS hope, as was Britain's, was ihat for the British, however: the old outside prices would rise so as to

Again in 1931 the pound left its fixed moorings, and pound goods the became chraper on the export mar

THE episode sounds extremely depreciation. And,

was: 30 per eest more 'ket.

The question was the extent of

As I say,

Since 1927 franc. Italian effort

been directedl has

1932, when the fed to cover children in employment|sities of prestige. The slogan was which

the

the

1930

........ 870,5

Europe ablaze, Macaulay's New Zealander, viewing the ruins, may SAVE THE CHILDREN

jexamine this speech for his prize exhibit to explain the nose dive of The discussions now in progress European civilisation? The dictatom. In the raising of the school leaving I was about to fix the value of the Italian currency. Yet he passed age in Great Britain lend added ursority over all economic criteria. point to the recent debates of the The yardstick was: the ra must International Labour Organisation be worth 30 per cent more than

the trane! There

terrific the League of Nations on the cheering at this, and the dictator A short while ago Mr. Bald-same subject. Among the "guiding then exclaimed dramatiehilly:

t the 201

"I say to the whole civilised principles" set forth win was asked in

world that we will defend the lira. the flouse

called "Labur Charter" which laysi

to the last breath, to the last bl Commons what progress

drop of blood our tira, which down the aims and dijects of the

represents the symbol of the no- defence was being made in

International Labour Organisation i

tion, the sign of our wealth, the prestige was associated with honour, save too much deflation. Great Britain against of

fruit of our laboure, of our

Bat the hope proved Illusory. In The prewar rate with the dollar that en the abolition of child

outside prices began their efforts, of our sterifices, of our happened to be the prewar legal 1920 nir attack The Prime Minis-

labour and the imposition of such.

trara, of mer blood."

promise suspended by the war. The catastrophie decline. The result was fr answered: "Methods

Imitations on the labour of young

Again rivissimi applanai. This Bellish wished to keep that pledge, to ixost the price disparity between in the ease of Italy honour did Italy and the outside world. More combatting air attack are con-

as shall permit the con-[classic example of demagogy is now

arise to mix with prestige, deflation for Italy! jersons

There was no intention of going stantly being studied and 'de-tinuation of their riducation, und emblazoned on a monument in the not

public square in Pesare.

back to the prewar parity. véloped, and valuable progress assure their proper physical deve- has been made". He went on flopment. The 1.1.0. has from the to say that it would not be in test considered this as one of its foolish. But before we criticise yardstick

Mussolini. Instead of following The first Il Duce, let us recall Great Britain, than argent the public interest to discuss most

In 1925 the pound was "oating," at keeping it there. What foreign suit, ordered a third period of de- the methods under considera-Labour Conference in 1979, on like the lira. He that year Britain, economists observe. Italian apologists fiation, mitigated by re-employing on public works the men thrown out tion. That answer should. be feluded a Convention prohibiting the re-fixed its earrency to the dollar proclaim.

Prestige about currencies is of jobs. But the reduction of wages The maintenance of the pound apt to be costly.

Dnd other costs was not sharp enough read in conjunction with an employment of children * (ie, per at the prewar rate.

required a mighty national effort, earlier observation by Mr.sons under 14) in industry. Grad-

Italians have paid dearly for the to put Italy back on an expert basis. that elfort was held

a kind of brake on oratorical flight at Pesare. When a n fact, the public works expendi

tures neted as be justified by the to

Thus Italy saw ile neces- currency is overvalued, internal costs, Baldwin on this same subject.ally the principle has been extend-but

are in lire, are too high in falling costs.

flence exports dwindle (before Sanctions) In November.

at sen, in agriculture, and in non- "We must make the pound look relation to foreign prices. British Government had not

September, 1931 findustrial employment, respectively. the dollar in the face," uttered in Italian goods are hard to sell. An in this fashion (millions of lire):

the newspapers and in the City of instance will show this.

Economic Conference) 510.1 given up. hope of an agreemem. In-all-cases an age limit of fourteen London, though not attached to any An Italian cheese costs just the May, 1933 (prior to the World

March, same in fire whatever happens to the

-393.8 on air disarmament-that is to has been adopted, although light monument.

foreign value of the firm. If the For six years Britain kept it up. lira Ruddenly advanced in value by The was fleeting moment in say before Lord Londonderry's work outside school hours is allow

Then in 1931 we finally let the 30 per cent, then the cheese ex- mid-summer, 1933, when deflation NOW Famous boast abouted under the agricultural Conven-pound slide to its natural level and pressed in pounds or dollars will be might have been stayed by the re- rate with increased 30 per cent. Other cheese tarn of world economic understand- "having with difficulty retained tion for childron of twelve years no longer associated a

will then be given the preference, ing at the London Economic Con- Therefore the Italian seller must cut ference. The effort, however, ended air bombing"—Mr. Baldwinold, and there are similar modifica-prestige.

Indeed, as between the pound down his costs in order to compete in ashes. Bou-and

the dollar, some time ago with the foreign cheese. declared that "the man in the tions in the Convention on

Broadly there, seemed employment.

to be competition, no industrin

This means deflation. street should know that

speaking, however, the general according to American economists,, is what happened in Italy as the power on earth could prevent

principle has been established, and as to which could be knocked down result of the initial overvaluation of

lower! him from being bombed. What-adopted in a great number of coun ever he might be told to the tries of the total prohibition of contrary. the bomber. would child labour under fourteen years always get through".

At the last International Labour! Lonly defence," Mr. Baldwin

Conference the auggestion was put! went on to explain, "was in

forward that all these Conventions offence, which meant that you ought to be revised to raise the age must kill more women and limit from fourteen to fifteen, The children more quickly than your motive behind this suggestion is partly humanitarian and partly enemy in order that you might economic, since owing to the alarm- save yourscil". That was the ing growth of World unemployment situation three years ago, when the intensification of Inter-

national competition, it huis become | bombers which travelled

n increasingly strong temptation] 150 and 180 miles an hour were to emplayers to use child labour, considered to be well among while adult workers' remain idle. the average of their kind. To-The Governing Body, at its Inst day things are vastly different. meeting, decided to initiate the pro- edure for revising the Conventions. Britain has a bomber which can Governments are now being asked | travel at 300 miles an hour and for their views and it is to be ex- manoeuvre with the agility" pected that the whole question off of a fighter. In the past a bom-raising the age of entry into em- ployment will come up for full inter- ber would naturally choose a national discussion in a year or :loudy night in order to avoid two. any danger of being detected by searchlights. To-day a bomber has wholly outstripped defence. can actually meet a fighter vir-Clearly the only way of guard-| tually on terms of equality. Ining. Britain's shores against air the past Britain and her attack is through the limitation Dominions were able to rely for of air armaments coupled with security against attack upon such security arrangements as British Navy. To-day the Western Air Puct and as are faced with the grim those contained in the Covenant reality that attack in the air of the League of Nations:

LTD.

the

we

"The

at

|of age:-~~-

the lira.

And this

*

*

ordinary measures to impede lin Ts time it had to take extra- ports made cheap in lire by the Hira's bigh value.

All kinds of controls had to be of the Ret {1]. Quolas, control foreign exchange market so that

SIDE GLANCES By George Clark foreign money is issued only for im-

"Now tell duddy we had a long talk and you have promised to be a good boy,"

ports that are absolutely necessary, purchase of foreign money from Italian holders, and now control of gold movements-all of them have been put into effect. Now the chic- kens have come home to roost in this adventure in Africa.

Sooner or later the Pesaro prestige of the a must go.

brokers the nd- To exchange venture in Africa appears to be the last gasp of economic Italy. Live depreciation will probably not be heard amid the din of battle and the monument, if it is of bronze, may have to be melted down with the currency.

The decline of the lira, however, by no means would signify the col- lapse of the Italian war effort.

As highly as I regard the place

of economic causes among the causes of war, finance is overrated.

This is a lesson from the World War.

The "other day I was looking through the newspapers published in July, 1914, and this is a typical in- vestment banker's comment:

"In our present stage of civili- sation, if it can be called that, auch a war would cost at least £10,000,- 000 a day, and the money simply could not be found."

.

But, as we found out, the money could be made, and, it was made.

The fact is that men nad materials are the key to war effort, and, of the two, men are more important.

If I, who am accused by my friends of taking too economic a view of life," were to be asked how long Italy could last,.1 would say that that all depended upon the Italian "wor