ISOLATION POLICY.

Auckland Star, Volume LXIV, Issue 160, 10 July 1933, Page 9

ISOLATION POLICY.

POSSIBLE EFFECTS.

"LITTLE REASON TO WORRY."

MR. HEMINGWAY'S VIEW,

Giving his third address to Auckland Rotarians to-day following his return from U.S.A., Mr. W. H. Hemingway brought hie account of America and its people up to date in the light of recent happenings. He said that , since his previous address, the outlook for the Economic Conference had been seriously clouded. Fiance and the United States appeared to have been the chief disturbing demerits.

After.emphasising that the view that America should in effect eeek to isolate herself economically has many and strong supporters i'.i the United 'States, Mr. Hemingway said one could not lose sight of the significance of President Roosevelt (nominally in furtherance of his economy programme) recalling 80 per cent of the commercial attaches at the various American embassies and consulates and closing the eight American trade commissioners' offices in Europe and those in other parts of the world, including that of the American Trade Commissioner in Wellington.

The effect was bound to act inimically towards, and, ultimately well-nigh to destroy the American overseas, trade organisation so\expensively built up by the much-travelled Herbert Hoover, first, when Secretary of Commerce and, later, when President of the United States.

"It is proverbial that things move quickly in the United States and the present would appear to be no exception to the general rule." said Mr. Hemingway. It seemed that President Roosevelt was now more determined to attend to matters at home than to co-operate with the nations lor general world improvement, and in his deeire to secure a return to prosperity for his country he had sanctioned the expenditure of huge sums on public works and the cheapening of money. That would result in inflation which, he hoped, he would be able to control.

"Dropping" Europe. After outlining the legislative measures whereby the Roosevelt programme was to be carried out, the speaker said that whatever the result, such legislation, carried out in conjunction with the new banking and economy laws, would seem likely to have considerable effect on the attitude and action of the United States at the world economic conference. It was possible that once more the mass of Americans would come to regard the troubles of the rest of the world —particularly those of the countries of Continental Europe—as a subject which did not concern her. He emphasised, however, that the attitude of the mass of Americans towards Europe did not include Great Britain. Ten years' activity in the vortex of American industry and finance had taught him that the real American had nothing but the greatest respect, if not admiration, for the British Commonwealth of Nations.

If the United States djd decide to fall back on a policy of comparative isolation it would go hard with those American industries which, by reason of their production being so miich in advance of domestic requirements or consumption power, demanded that America must export. What also of those imports that America must secure from abroad (for instance, rubber, tin. silk, nickel, tea, coffee) ? Even in these days of high tariffs the United States allowed 66.2 per cent of her imports to come in duty free, though on the remaining 33.8 per cent of imports America imposed on an average a tariff of 46 per cent, which figure was reached by the Hawley-Smoot Act of 19.30, adding new duties to many articles .\nd increasing tariffs previously existing by 16 per cent.

TLe Outcome. "Suppose America does decide to shut herself off from the rest of the world. What would be the effect if she really did succeed for a time?" concluded the speaker. "She might export nothing, but she would still have to import those com; modities enumerated, for they are essential to modern civilised life. Well, for years . ,w the war debt payments have assisted to give America a favourable trade balance and have helped to throw foreign trading transactions out of gear, but, in the new circumstance*, how long would they continue to do so? Not for long. In a comparatively short time the present-day debtor nations would become creditor nations of the United States— the balance of trade would begin to operate in their favour. Add to this a development oi the arbitrage of exchange (which Great Britain, in particular, might make use of) and we should soon have a flow of gold from America. The old cycle would commence to go round once more and prosperity would soon return to the world. Such would be the inevitable result in tima if America dccidee on a policy of comparative isolation. I see little reason to worry in the long run if America doee decide to drop out of the conference and the rest of the nations are left to adjust matters among and for themselves."