THE CONFERENCE

Ashburton Guardian, Volume 52, Issue 248, 2 August 1932, Page 5

THE CONFERENCE

OTTAWA GATHERING. EMPIRE PREFERENCE ISSUE. SOUTH AFRICAN STATEMENT. REPLY TO SOME COMMENT. NOT A BTT OF DISCORD. (United Press Association—Copyright) (Received This Day, 9.40 a.m.) OTTAWA, August 1. It is expected that the Empire Economic Conference,, when, it resumes tomorrow, will continue to make progress, but decisions in none of the vital issues can' be reached* in this short week, which closes on Thursday. The newspapers wrongly describe Mr Havenga's statement yesterday as the "first note of discord," because he referred to the trade position in relation to gold, as stated in Mr Baldwin's document, as "clearly fallacious." South Africans do not intend their arguments to be construed as containing the slightest hint of hostility, of merely a desire for the Union's trade position to be seen in truer perspective. Mr Neville Chamberlain, reviewing the proceedings to date, said to-day he cherished the highest hopes of a successful outcome.

Canada has not yet disclosed fully the concessions she was willing to grant to Britain; The wheat policy is still undecided, but it is believed that Mr Bennett will adhere to the request seeing that this part preference for park and bacon, which would stimulate the pig industry, represents all the Prime Minister could offer western farmers, because whatever Canada may ask Australia will give it solid backing, inasmuch as the Commonwealth is not making wheat one of the main planks. British and Dominion Government officials continue the examination, of the butter, meat and fruit proposals. Mr Richardson and Mr McDougall representing Australia and. Dr. Craig and Mr Campbell New Zealand. REPLY TO BRITISH STATEMENT. OTTAWA, July 31. Mr N. C. Havenga (South Africa) has issued a statement commenting on the British delegation's' pronouncement -bearding preference. Mr Havenga says: "The history of trade relations between Britain and South Africa makes it unnecessary to stress the already clear fact that the idea of striking' a balance-sheet of advantages and concessions is quite foreign to the minds of the South African delegation. Nevertheless, I feel constrained to offer comments on some* of Mr Baldwin's observations and deductions, doing so not in a carping, ungenerous spirit, but in. a frank effort to see the trade relations between the two countries in a proper perspective. South Africa never objected to/ Britain's treatment of her commodities nor complained of the spirit Britain manifested in trade matters, nor has she been querulous of the fact that preferential treatment was not always reciprocated. South Africa always had a clear perspective of the different circumstances of the two countries and of the categorically imperative duties each owes to its domestic industries. South Africa admits that Britain's emergency tariff at the end of 1931 and the. Abnormal Import Duties Act, 193?, greatly widened the range of imports subject to the tariff, which extension is of some value to South Africa. It must be mentioned, however, that the Dominions were not consulted regarding the selection of commodities subject to this tariff, nor was there correlation between these preferences and each industry's requirements. Greater elasticity in these preferences would have been of greater utility to South Africa. "South Africa would have preferred to see a slightly larger "margin preference in favour of certain commodities affected, whereas regarding others the extension was not so material: South Africa submits that a statement such as Mr Baldwin's does not best serve the objective of the Conference, namely, examining ways and means of Empire co-operation and extending the existing markets. Mr Baldwin's statement aggregates the Dominions' trade with Britain and consequently reflects ar favourable trade balance for the Dominions. South Africa's' position is peculiar. She encouraged British imports without insisting on quantitative trade reciprocity and if the figures are examined in their true perspective they would show that the balance of trade is definitely in British favour." Mr Havenga showed that Mr Baldwin's figures showed South Africa's total imports for the year 1920 from all sources as £63,357,000; from Britain £29,735,000; from other British countries £6,947,000; from foreign countries £26,675,000. Mr Havenga stated these did not reflect the Union s adoption of British goods nor the increasing market the Union offered for those goods. Within one year, South Africa rose from eighth place, compared with other customers of Britain to fourth place, which she now occupied. Mr Baldwin had stressed that a large proportion of Dominion products was still enjoying free entry into Britain. Mr Havenga submitted that accentuation to this point was disproportionate to the consequential advantage to the Dominions. Britain takes from the Dominions mostly foodstuffs and raw materials, which in its own interests and in accordance with its fiscal policy have been given free entry. Britain s exports are manufactured articles. Soutli Africa would see nothing unnatural nor unreasonable in her produce being subjected to duties in the British market for the protection of Britain's domestic produce. The delegation would not suggest that Britain should grant con-

cessions militating against British domestic industries, but South Africa would welcome preference for Dominion oyer foreign products. South Africa considers that the table showing that the Union has a considerable favourable trade balance is misleading because it gold among consumptible merchandise, also transhipments and subsequent exports. South Africa uses more than twice as much British merchandise as Britain uses South African merchandise. Inasmuch as South Africa has not sufficient; commercial bills in Britain to pay for what she buys there, she is compelled to pay for a portion in cash. Soutli Africa is looking for outlets for her ordinary commodities, not for gold, and does not find it necessary.to offer a large share of her competitive trade to secure an outlet for her gold. Soutli Africa bought from Britain in 1930, more than £29,000,000 worth of commodities which enter competitive trade while Britain bought from Soutli Africa £12,000,000 worth of such goods. This favourable British position in South Africa's competitive trade is a normal position. Mi- Havenga suggests early discussion as to the lines on which Britain and South Africa can give mutual assistance. THE MONETARY PROBLEMS. COMMENT ON BRITISH POLICY. (Reecived This Day, 9.10 a.m.) OTTAWA, August 1. While there is no official indication of a probable solution of the monetary problem there is a general fecting that the policy of the British Government and Bank of England during fife last three months has been absolutely right, everybody in conference circles cordially agreeing with it. Several months after Britain left the gold standard, apparently neither the British Government nor the Bank of England had a definite policy. Thus interest rates remained at from five to six per cent., which meant dearer money. During the last three months the Bank of England, with the obvious concurrence of the Government, has been pursuing a policy of reduction of the discount rate, which is now the lowest in history, meaning cheap money. *A second factor in the situation, which is also regarded with utmost approbation in conference circles, is Britain's conversion of £2,000,000,000 five per cent, war loan to 3£- per cent. Thus the low bank rate means cheap interest rate on short term securities, ine lower war loan wings a cneaper rate on. first-class long term securities. A third factor is the establishment oi the £150,000,000 exchange equalisation iund announced in the Britisli Budget, which represents the Government's definite determination to prevent speculators interfering with the exchange position. There is a tremendous amount of international snort-term money, which under other conditions would have been directed to long-term investment avenues. This involves the movement of a vast volume' of international money from one country to another, causing violent fluctuations in exchange and upsetting equilibrium by heavy flooding or equally heavy withdrawals. Britain suffered twice during the last year by reverse processes, whereas "the withdrawal of a large amount of short-term money from Britain was a big factor in forcing her off gold. She has been equally embar rassed during the last few months by the inflow of a great volume of international short-term money. Fluctuations in exchange have been caused more by the movement of this shortterm money than by the actual balances of trade between the countries. Whether the stabilisation fund o £150,000,000 is sufficient has not yet been demonstrated. Nevertheless it will be a big factor in checking instability of sterling exchange in relation to the gold dollar. One question being discussed_in conference circles is whether Britain will indicate with sufficient denhiteness whether this recent ' policy will be steadfastly pursued whatever happens, also whether Britain can do anything more. AN EXTENSION PROBABLE. TO LAST THROUGH AUGUST. OTTAWA, July 31. Opinion is veering to the view that the Conference, in spite of the early rapid progress, cannot finish before the end of August. It is unlikely that the Englishmen will be able to occupy the berths they have booked leaving Montreal on August 26, by the luxurious liner Empress of Britain. It is feared, however, that if the Conference lasted much beyond that date it would almost be an admission of failure, but it is doubtful whether within three weeks, the monetary problem now seen as the paramount item can be solved or taken to a stage where postponement to a wider conference would be agreeable to the Empire delegates. The Australians going to London .n----clude Mr and Mrs Bruce, Mrs Guilett, Messrs McDougall, Tout, Riddle, Melville, Duffy, Osborne and Mills. All the New Zealanders, except Messrs Forsyth and Davis, (London representatives respectively of the Meat and Dairy Boards) will return home immediately after the Conference.

TWO METAPHORS GIVEN. CURRENCY THE CRUCIAL POINT OTTAWA, July 31. The cooks who are busy at Ottawa preparing an Empire meal have not yet solved the problem regarding all the ingredients. It is not expected to be a lavish banquet, They are concerned merely in providing an honest working-man's dinner. They consider they have already solved the butter problem. There is no difficulty about bread, because the wheat farmer has produced abundantly. Regarding meat they have the roast ready in the pan.

Assorted fruits adorn the side-board. The only question that remains is "can we provide gas for the cooking stove." In other words, that is the currency problem. There is a bountiful supply of everything a hungry man needs. Can we have it? Can Ottawa put the starving Empire in a position to purchase its meals? The early stages of discussion on monetary problems indicate that it probably would be wise that the Conference holiday arrangements will give time for the incubation of ideas which have been outlined.

The utmost secrecy is observed regarding the trend of the suggested action because if any hint were disclosed it might conceivably embarrass Britain if she were involved at the Dominions' behest in a volte face or amendment of her original proposals. Moreover), premature predictions of the final 'scheme might entail worldwide repercussions if a policy which meant general curtailment of production were adopted, it is difficult to imagine what may happen. Economists are walking the corridors with a consciously impotent air. They have now taken their places under the spotlights down stage. Everybody in the select audience is weighing their words. Even if, as anticipated, the preliminary speeches on currency are released on Tuesday in an. abridged form, they will not contain a single word of the plan now being discussed. They will merely outline the sorry plight of the Dominions and embrace a review of Britain's returning financial health. It will show that Australia and India have developed a common tie out of common distress.

The present interregnum in official business does not mean complete stoppage of progress. On the other hand, it means accelerated activity on the part of the sub-committee that is reviewing the currency problems. These experts are accomplishing really effective work during the week-end they have been asked two questions. The first is, is it advisable and practicable to raise the prices of commodities and if so how. The second question is, is it advisable and practicable to stabilise exchanges, and if so, how?

It is agreed that the answers cannot be furnished within a few days. The report will involve the most serious consideration of any subject before the conference.

The heads of the delegations especially realise the deep responsibility and it is unlikely that any essential progress toward a decision will be made until next week, after delegates have returned from Niagara. PREFERENCES OR DEBTS. HARMFUL STATEMENTS IN AMERICA. OTTAWA, July 31. Some remarkable and sometimes mischievous guess-work in regard to the Empire Conference has been noted in articles appearing in American newspapers, notably the suggestion that Britain instead of extending preferences will cancel portions of the Dominions' indebtedness. How such a plan could assist the primary producer to sell his goods profitably it is' impossible to see. Besides, apart from the war debts owed to tho British Government, all the Dominion loans represents debts to private leaders in the London money market. Indeed if all the Dominion loans were suddenly wiped out it would not be a remedy and could not be compared with the effectiveness of the provision of preferences in enabling the primary producer to evade the complete ruin whither he has been descending in the past two years. Another suggestion which has been given harmful prominence in New York is that the dominions are asking Britain to reduce her imports of Argentine ■ chilled beef by 45 per cent. The dominions' meat proposals certainly include a quota but do not specify any hard and fast figure or what should be taken off Argentine imports. They merely express the desire that the dominions be given a better chance of securing payable prices in what is now a saturated market. There is a suggestion however, that Britain should reduce her imports of foreign frozen meat by per cent which it is calculated will afford Australia and New Zealand infinitely more favourable marketing conditions. ■ ATTRACTIONS OF OTTAWA. A BEAUTIFUL CITY. (Received This Day, 9.40 a.m.) OTTAWA, August 1. The delegates are taking advantage of the glorious sunshine to visit some of Ottawa's conveniently situated picnic places. Ottawa is revealing herself to delegates during the intervals in their labour as a beautiful city. The wide sweeping river which becomes a great frozen, sleigh thoroughfare in the winter months now carries busy traffic of river boats, barges, pleasure launches ind canoes. Several canoe clubs with fashionable membership, are dotted •.long the banks. These resorts are popular also for tennis and dancing. The delegates have yielded to allurements of the French quarter of the city, named Hull, just across the river in Quebec province, where the liquor restrictions are relaxed and there is brighter night life. The Chateau Laurier, one of the best hotels in North. America is luxuriously appointed and proportionately expensive, but the official delegates are the guests of the Canadian Government. Parliament House stands majestically on Parliament Hill behind the Chateau, five minutes walk over the Iliclean Canal, joining the Riclean and Ottawa rivers. Here crowds watch the stumpy canal boats going through a. series of six locks similar to those on the Thames. A party of delegates were amused at hearing a mother callinig to her children "Come and see the steamer going downstairs." The spacious Parliament grounds with its wide terraces provided an ideal setting for the pageantry of the opening ceremony. Now red-coated Royal Cana-

dian Mounted policemen, with revolver holsters on their belts, continuously pace the paths. Delegates and pressmem are required to present cards for admission to the building, whose 500 rooms have been vacated by Commoners and Senators, and are entirely occupied by the Conference delegates and their numerous staffs. Dr. Manion (Minister of Railways), of Irish descent and breezy manner, presides at a press interview twice daily. He endeavours dutifully to make bricks out of strawless communiques. This studied official silence i« inevitable but is responsible for columns of newspaper articles based on gossip in the lobbies. It is expected however, that the communiques will shortly contain some news.