AT THE end of March a new Belgian government of national union was constituted, with the coöperation of the three chief Belgian parties -- Catholics, Socialists and Liberals -- and with Paul Van Zeeland as Prime Minister and Minister for Foreign Affairs. The program of economic recovery which this government presented to Parliament is inspired by new principles and utilizes new methods.
In its monetary policy the Van Zeeland government was obliged to take cognizance of the new situation created by the de facto suspension of the gold standard on the day when the late Theunis government had taken over control of exchange. The Premier therefore announced that he was forced to devaluate the belga slightly, in order to obviate a serious economic and banking crisis. This new orientation of the monetary policy was a direct challenge to current public opinion and to the ideas held by the majority of Parliament.
In order to restore confidence in the banking system, which threatened to be badly shaken, a series of financial measures was proposed: a state guarantee of bank deposits, should that prove necessary; the creation of a National Institute for Rediscount and Guarantee; the creation of a Central Mortgage Institute; and, finally, the coördination of the banking system with government policy.
By way of general measures of economic expansion, the new government chiefly contemplated a rise in wholesale prices sufficient to put business once more on a profitable basis, a gradual and moderate rise in retail prices and the cost of living, a general lowering of interest rates as a preliminary to the conversion of government securities, the wholesale reduction of taxes, the supervision of stock exchange operations to prevent undesirable speculation, and the adoption of a public works program. A Bureau of Economic Reform, with the Prime Minister as chairman, was entrusted with the task of coördinating and harmonizing these efforts. As for social policy, the government announced a program for the gradual organization of the professions.
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