Economic and Financial Progress in Europe

Abstract

IN many respects I922 was a most disappointing year for Europe. The numerous international conferences were conspicuous failures and their failure prevented the taking of other important steps in advance. The Genoa conference, of which high hopes had been entertained, proved a fiasco. The Hague conference over Russian affairs came to naught. The Paris conference of international bankers in June reported that under existing conditions an international loan to Germany was impossible. The foreign experts called to Berlin in October to advise concerning the stabilization of the German mark, disagreed upon essential points, and the German government, ignoring the majority report, submitted an unacceptable proposal. Repeated conferences over reparations merely postponed a real decision, until early in January I923 a final disagreement led directly to the forcible occupation of the Ruhr. Although war in the Near East was checked before it became a conflagration, the Lausanne negotiations with the Turks were indecisive and the Angora government has since refused to sanction the treaty which their representative had been unwilling to sign. The partition of Upper Silesia was peaceably effected in accordance with the League of Nations decision, and Luxemburg became incorporated into economic union with Belgium; but there has been friction in central Europe over Vilna and Memel, and there are occasional signs of trouble in the Balkans. The noteworthy exceptions to the disappointment are the agreement to support the League of Nations in a vigorous effort for the rehabilitation of Austria, and the arrangement of terms for funding the British debt to the American government, which was accomplished early in I923. The important cabinet changes of the year, on the whole in the direction of greater conservatism, were of mixed character. The Poincare ministry in France is far stronger and better supported than its predecessors, but whether for good or for ill it is perhaps too soon to decide. In Great B,ritain the fall of Lloyd George led to the substitution of a conservative ministry for a coalition cabinet, with a leader of a very different type, but the new cabinet is not strong and its policies are mainly negative. Changes in the Wirth cabinet and the succession of Cuno have added little, if at all, to the strength or prestige of the German government. Only in Italy, where a bloodless revolution brought the Fascisti into power, does the change seem clearlyfor the better, for a strong government has succeeded the series of weak and unstable governments of recent years. Notwithstanding the lack of progress, and indeed some retrogression in these respects, the oft-prophesied collapse of Europe, or even of Germany, has not come; and the statistical evidence reflects unmistakably that I922, while a year of painful depression in several leading countries, was a year of substantial recovery and readjustment. Fiscally, the year was generally unsatisfactory but, with few exceptions, better rather than worse than I920 or I92I. Financially, with certain important exceptions, advances have been registered: on the whole, prices and exchange rates have been less unstable, securityprices higher, moneyrates easier; and business failures, though extremely high, have been declining and the liquidation process is more nearly completed. In respect to production, trade, and capital replacement and extension, the progress was well-nigh universal. The process of readjustment is not complete. Conditions are generally still inferior to those of pre-war days. Few countries in Europe have recovered as far from the depression as the United States. Yet the improvement of I922 was general and fairly continuous; in most of the war-torn countries of the continent productivity was higher and trade more nearly normal than in any year since the war, and the improvement is reflected in all sorts of financial and economic statistics. The outstanding exception to these broad statements is the fiscal and financial degeneration in Germany, which has many serious consequences even though it has not prevented an increase in German output. This article attempts a review and interpretation of the relevant economic and financial statistics. The material falls into two main groups: the financial relating to money rates, security prices, currency and credit, commodity prices, c79: