“The Conference affirms that the improvement of the financial position largely depends on the general restoration as soon as possible of goodwill between the various nations; and in particular it endorses the declaration of the Supreme Council of March 8, 1920, ‘that the States which have been created or enlarged as a result of the war should at once re-establish full and friendly co-operation, and arrange for the unrestricted interchange of commodities in order that the essential unity of European economic life may not be impaired by the erection of artificial economic barriers.’” Reduction of National Expenditure If trade is to be resuscitated, there must be a ruthless curtailment of national expenditure, an inflexible renunciation of everything resulting in expense which is not absolutely essential to present national existence. On this question the Financial Conference spoke clearly: “The statements presented to the Conference show that, on an average, some 20 per cent. of the national expenditure is still being devoted to the maintenance of armaments and to preparations for war. The Conference desires to affirm with the utmost emphasis that the world cannot afford this expenditure. Only by a frank policy of mutual co-operation can the nations hope to regain their old prosperity, and to secure that result the whole resources of each country must be devoted to strictly productive purposes. The Conference accordingly recommends most earnestly to the Council of the League of Nations the desirability of conferring at once with the several Governments concerned with a view to securing a general and agreed reduction of the crushing burden which, on their existing scale, armaments still impose on the impoverished peoples of the world, sapping their resources and imperilling their recovery from the ravages of war.” The Washington Conference has made some progress along this line. The matter was emphasized in more detail in the following resolution unanimously adopted by the Financial Conference: “It is, therefore, imperative that every Government should, as the first social and financial reform, on which all others depend— “(_a_) Restrict its ordinary recurrent expenditure, including the service of the debt, to such an amount as can be covered by its ordinary revenue. “(_b_) Rigidly reduce all expenditure on armaments in so far as such reduction is compatible with the preservation of national security. “(_c_) Abandon all unproductive extraordinary expenditure. “(_d_) Restrict even productive extraordinary expenditure to the lowest possible amount.”