TRADE BALANCES.

Auckland Star, Volume LXIII, Issue 240, 10 October 1932, Page 6

TRADE BALANCES.

BRITAIN AND DENMARK. • (To the Editor.) . ■ "Fair Trade's" letter of September 29 W just come under my notice. I would recon? mend him -to read my letter of the 36th nit" again, as he has completely missed the coinf ■of-it, which was to show that Britain's called "unfavourable trade balance" with Den mark cannot be remedied and need not be worried over, because whatever the balance may be an effective demand for British goods to an equivalent amount is created somewhere or other by it. "Fair Trade" quotes from a gazetteer of 1903 to the effect that Britain then bought from Denmark three times as much as she sold to her, and thinks that the position to-day has not improved since According to my figures, Britain now buvs five times as much as she sells to Denmark The balance of trade is not a good yardstick to use in estimating the wealth and prosperity of a country. What is of infinitely more importance is the volume of trade. The basis of all sound trade is profit, not for one, but for both parties engaging in the trade. Witk6ut this (mutual expectation of profit or advantage trade cannot take place. It is not a matter (between Governments or nations, but between individuals or groups of individuals who may or may not belong to different countries, but who are the best judges of what they want, of what they are prepared to pay for it, and where it is best to 'be procured and the less they are subjected to Governmental interference, direction, restriction or embargo the more profitable the trade will be. The greater the volume of trade the greater will be the gain of those engaging in it. Accord" ing to "Fair Trade," in 1903 Britain's total trade, exports and imports, with Denmark was less than £20,000,000. In 1930 it was over £60,000,000, a very great improvement", in my opiniort. Three years ago New Zealand's trade with Canada amounted to over £7,000,000. Last year it was £700,000, a shocking fallin» off, due entirely to tariffs foolishly imposed by Canada and by ourselves. Referring to the £40,000,000 excess of Britain's imports from, over her exports to, Denmark, "Fair Trade'' says "that England has to pay the difference is certain." Of course she has to pay it. But •having received full value in high-grade Danish commodities for it, how can she be a loser thereby ? And in what possible way can she pay except by her own commodities or services? The only way in which the Danes can use the British credit they have obtained' by tlieir £40,000,000 surplus exports to Britain is by transferring it to people who do want to ibuy British goods or services, and thus is created just as effective a demand for ■Britisih.goods or services as would have been ■the case if the balance of trade between Denmark and Britain had been equal. J.'E. STEVENS.