The main point of League action on finance has been to tackle emergency situations. The Finance Committee helps where a country is facing financial problems as a result of internal or external issues, and cannot solve them itself. As a rule, the Finance Committee has also acted in situations where it looked as though financial problems might cause a revolution or war. This was what happened in Austria and Hungary, and also in Greece and Bulgaria. In each case the Financial Committee was able to restructure the economies of these countries.
Printed for the Cabinet. March 1928.
C.P. 110 (28).
(a.) Lord Balfour’s paper on a Zionist loan: ref. C.P. 71 (28).
(b.) Cabinet discussion on the above: ref. Minutes, the 13th March, Conclusion 4.
I CIRCULATE to the Cabinet a very valuable paper by Sir O. Niemeyer on League loans which the Chancellor of the Exchequer has been good enough to obtain for me.
Foreign Office, March 29, 1928.
THE SPHERE OF THE LEAGUE FINANCIAL COMMITTEE.
2. The central point of League financial action has throughout been the general financial reconstruction of a country, both budgetary and monetary. This follows from the fact that the League Financial Committee arose out of the proceedings of the Brussels Conference. The Committee’s guiding thought has been the fundamental financial reconstruction of a country where that country, for either internal or external reasons, has not been in a position to carry through such reconstruction unaided. As a rule, it has also been the case that the absence of such reconstruction was likely to lead to convulsions which would ultimately endanger European peace. These conditions were pre-eminently present in the case of Austria and in the case of Hungary. They were also present in the cases of Greece and Bulgaria. In the case of Greece and Bulgaria the Refugee problem, with which the League started, was so large an element in the public finance of those countries, that it threatened to destroy financial stability. In both cases the Financial Committee took up the Refugee problem for that reason, and in both cases, at a further stage, a general financial reconstruction, including currency and the public budget, has followed. The case of Portugal, now before the League, is entirely of the same nature.
This is an extract from a report for the British government by one of its Treasury officials who had been involved in the League’s Finance Committee for several years. He was explaining to the British government what types of work the League Finance Committee undertook.
As well as trying to resolve political disputes between nations, the League also aimed to improve the lives of people all over the world. One of its key areas of activity was in economic reconstruction from the effects of war or other types of emergencies. The League helped to arrange large loans which saved the economies of Austria and Hungary in 1923 and helped to resolve a dispute between Greece and Bulgaria in 1925.
In the case of this particular document the League Finance Committee had been asked by the Zionist movement for a loan of £2,000,000 for economic development in Palestine. Large numbers of European Jews had migrated to Palestine in the 1920s (see Source 3 of this investigation). The loan was turned down because the Finance Committee saw its role as tackling emergencies rather than general economic development. The League had also previously been careful only to give loans to governments and did not want to change this policy.
Remember we are hoping that this source can be useful to us in investigating how far the work of the League of Nations mattered in the 1920s:
1 What is the role of the Finance Committee?
2 What are its aims?
3 What achievements has it had?
Which of the inferences below can be made from this source?
|On a scale of 1-5 how far do you agree that this source supports this inference?||Which extract(s) from the source support your argument?|
|The Finance Committee has been a success|| || |
|The League was doing important and valuable work|| || |
➜ Source 8