CREDITOR NATIONS.

Auckland Star, Volume LXVIII, Issue 25, 30 January 1937, Page 18

CREDITOR NATIONS.

BRITAIN'S POSITION. INCOME 32 P.C. BELOW 1929. STEADY SLOW RECOVERY. (Own Correspondent.— By Air Mail.) LONDON, January 9. Britain still remains the world's leading creditor country, it is clear from comparative figures just published by the League of Nations. Not even during the depths of the depression did we yield pride of place. In 1029 we had a net income from overseas investments and short-term loans amounting to f313,000,000, which was more than twice the income from similar sources earned by the United States. Although this large income had fallen three years later by 44..") per cent to £ 1-7.'.,000,000, t lie income of the United States had in the same period fallen by 33 per cent to £93,.">(>0.000. Since 1,932 the position in this country has revived steadily, if slowly, but in the United States it has continued until recently to decline. Comparative Supremacy. Thus Britain's overseas investment income stood at £'213,000,000 in 1933, while that of the United States had fallen to £77.000,000. Kveit i. we had been paying our £40,000,000 odd of war debts, it would not seriously have challenged our supremacy. In fact, Britain's favourable income balance was actually larger than the incomes of all the other six countries which had favourable balances put together. These countries were France, Switzerland, Belgium-cum-Luxembourg, the Free State and Greece, in addition to the United States. By far the most important of these live is France, which in 1933 had an income from foreign investment of £31,100,000. Yet, in spite of Britain's supremacy, it must not lie forgotten that the income from foreign investment is still 32 per cent lower than it was in 1929. Future Hopes. What chance is there of a return to the 1929 level? Sir Robert Kindersley, who has made a more thorough study of this problem than any other economist, recently stated that in the aibsence of any unforeseen disturbance there is every reason to hope that we shall see a return towards the pre-depression level during the next few years. Certainly such a revival is very badly needed. Kven if Britain's total income from overseas investments and shortterm loans is found to have risen during 19:t(i to £233,000,000, there will still be a deficit for the year of round about £20.000.000 on the country's balance of payments. Although this income from abroad will probably continue to increase, it is quite likely that any such increase will be outpaced by an ever-widening unfavourable balance of visible trade. Can Imports be Reduced? It is not to wondered at that Sir Robert Kindersley found it necessary to say in the December issue of the "Kconomic Journal"' that this widening gap between imports and exports must be arrested, if we are to have a satisfactory balance of total payments and in addition a moderate surplus available for capital investment abroad. The trouble is that British industry's present concentration on rearmament is not only diminishing the amount of energy that can l>e put into the export tradcr-, hut i.s also leading to an increase in tli imports both of raw materials and of the every-day commodities needed to satisfy the demands of the new wageearners who are lieing absorbed into the arms industry. Unless this growing danger is taken in hand, we may lind that the next slump has descended upon us before we can once more build up a surplus on our internatu nal i alanie of payments. It will be a thousand pities if the rearmament boom prevents us from making hay while the sun shines.