FRIDAY, MARCH 14, 1919. TRANSITION IN TRADE.

Auckland Star, Volume L, Issue 63, 14 March 1919, Page 4

FRIDAY, MARCH 14, 1919. TRANSITION IN TRADE.

A very Important announcement on the trade policy of the British Government has just been made, and it is sig nificant that the Minister who made it was not the President of the Board of Trade, but tlie Minister for Reconstruction. The trade problem facing the Government is largely one of reconstrue*

lion, uf turning over, a. quickly and as smoothly as possible, the industries llntt have been operated tor war purposes, to the demands of peace. What the Government proposes in respect to imports is to encourage the importation ol raw materials for the use of manufacturers, but to restrict the iiillow of manufactured or semi-manufactured goods which would compete with British industries that require shielding during the reconstruction period or have been encouraged to extend their operations in consequence of tlie war. This policy will be reviewed six months hence, by which time British industry should lie in a mtrre settled state, and its outlook should be clearer. To

encourage the importation of raw materials is a step of obvious wisdom. Kaw material is the basis of manufacture, and Britain needs to take the quickest and smoothest road leading back to normal conditions of industry. To

give a measure of protection to industries in the transition stage, or industries which have expanded under the stimulus of war, is also sound policy. Tho crisis forced upon Britain ,1 vast industrial transition from peace to war. Hundreds and thousands of factories had to give up making the things they had been designed to make, and make the things that the Navy and Army wanted. That the change cut away liome and foreign markets did not matter; the safety of the State came first. Now, with the war won, British

industries have to face, firstly, the problem of getting back to the making of ordinary goods, and secondly, the competition of allies and neutrals whose industrial equipment and resources have not been so greatly disturbed and strained. It would not be fair to the British manufacturer to expose him to the unrestricted competition of these favoured foreigners. America is by far the most formidable competitor. Since America's efforts in the war have 'been far less exhausting than Britain's, it is feared that American manufacturers will resume normal trading competition with a considerable advantage. The change in the relative positions of the two countries has been noted in America, and the irony underlying it realised. A writer in "Collier's Weekly" considers that as a result of the war, Great Britain has surrendered her commercial and mnritime position to the United States; the nation that made such vast sat-Tilices and suffered so

greatly is to lose its supremacy to an ally that has neither done nor suffered so much. More striking than this is the declaration of the Cnited States Secretary for Commerce, that American manufacturers ought to resist the temptation to take advantage of their present gieat opportunity to extend their export trade, and restrain their energies while the exhausted belligerent nations get on their feet. Pointing out that American freedom has been secured by the sacrilices of others, Mr. Redlield asks

American exporters, "in tlie largest international spirit," to accord freedom of opportunity to the war-ridden nations to make livings fur themselves, and urges that the good will of America in the future depends on whether European nations conic to regard the American trader as a "vulture winging to the feast." We cite this remarkable expression of idealism as evidence not only of the opportunities which the war has created fur American trade, but of the realisation in some quarters that these opportunities at the expense of America's allies are not deserved. Americans cannot complain if Britain takes steps to protect her own people.

Mention of American competition brings us to another important question in to-day's news, the matter of freights between New Zealand and Britain. New Zealand exporters are complaining of the maintenance of high freights between this country and Britain. The freights are still under the control of the Imperial authorities, who insist that large reductions cannot be made at present, and as the Atlantic freights have been reduced very considerably, it is suggested that American trade is being encouraged at the expense of New Zealand trade. This theory and the resultant one that the British authorities think that the Dominion's markets are secure, and therefore need not be cultivated so

assiduously as foreign markets, seem to us to _c quite plausible, but such a policy is hardly consistent with the policy of getting raw material to ilic English manufacturer as cheaply a< possible. The heavy freight rates ruling from New Zealand to London, and presumably also from Australia, increase the cost to the manufacturer of woollen and other goods. They must also affect the price of certain lines of food to the people of Britain. We hope the New Zealand Government is urging upon tlie British (rovcrnment the' unfairness of maintaining these high freights from the Dominions. Finally, we may note in connection with this statement of policy by the British Government, that while it amounts to protection, it is not orthodox protec-

tion, and tlie Government distinctly states that it is adopted without prejudice to the future liscal policy of the Government. This seems to be a weakness in tlie scheme, that the British manufacturer will be kept in doubt for at least another six months as to what the permanent fiscal policy of the country it going to be. In discussing tins question the "Round Table" remarks that industry cannot tiourish tinder such uncertainty. '-If tlie Government has in mind a return to Protection or some substitute for tlie systems of Protection that were advocated before the war, let il declare its intentions plainly, and give the men whose economic future will be affected an opportunity of gauging its prospects." But probably the Government either does not know its own mind in respect to liscal policy, or has not had time to make it up, and welcomes the six months during which the new system will operate as a respite in which if can frame a programme.