ECONOMIC CONDITIONS.

Auckland Star, Volume LXI, Issue 237, 7 October 1930, Page 5

ECONOMIC CONDITIONS.

WORLD-WIDE DISTURBANCE.

ENGLAND'S FISCAL POLICY.

MOVEMENT FOR PROTECTION.

"The most striking happening in England is the movement towards protection. It is disguised as Empire free trade, but protection of the Home market is the real objective. England seems to have abandoned hope of regaining her position in foreign trade, but as she is etill of necessity a large importer of foodstuffs and raw materials it is difficult to see how she will be able to balance her trade if ehe imposes on her export industries the handicap of higher coets through protection. The advocates in England of Empire free trade have overlooked the natural desire of the Dominions to establish secondary industries of their own."

The statement was made yesterday by Sir Lennon Raws, of South Australia, managing director of Imperial Chemical Industries of Australia and New Zealand. He hae just completed a world tour and is returning by the Aorangi. "Economic conditions abroad," he said, "are disturbed, and are unsettling political and social conditions. On the authority of Mr. Arthur Henderson, British Foreign Secretary, the conflict between economic conditions and political aspirations in the East is the most difficult problem of British foreign policy. Revolutions in South America and political unrest in Europe are ascribed largely to economic conditions, which are also challenging the competency of the parliamentary form of representative government in more advanced countries. Youths on the Dole. "In England the increasing number of youths who graduate from school into the dole and the large number of men who, through lack of opportunity, are losing the will to work, are serious features of social life. The general decline in commodity prices is raising doubts about the diicacy of the gold standard. It is estimated that at June 30 last 55 per cent of the world's gold was held by the United States and France. In certain quarters this concentration is held responsible for the fall in prices. As France is still hungry for gold a further decline is forecasted. America is still suffering from the effects of the collapse of the Stock Exchange boom twelve months ago. The mania for speculation permeated every section of the community. "Another cause of depression is the slowing down of instalment buying. The rapid extension of consumer credit was a form of inflation which led to overproduction. It has now spent itself, and production has to be adjusted. The United States is looking to foreign markets and is specially interested in Australia and New Zealand. Problem of the Surplus. "Speaking generally the world problem seems to be "that of the surplus. Almost every country has increased its output in industry and for agriculture at a greater rate than its consumption has increased, partly by improvements in technique and partly by artificial standards. The policy of trying to maintain higher internal prices through tariffs and other means, and of dumping the surplus abroad is leading to retaliation and endless other complications. "Although there may not be much cause for optimism about the present state of trade," he concluded, "the future can be viewed with much greater confidence in Australia and New Zealand than in Europe. Australia has handicapped herself by past extravagance, but the way to prosperity is clearly defined. In New Zealand the position should be much easier, because of the lesson of 1922."