Preference Through Loans.

Press, Volume LX, Issue 17985, 31 January 1924, Page 8

Preference Through Loans.

One of the most interesting of the conclusions of the Imperial Economic Conference was the undertaking given by the British Government that it wa3 prepared, on certain conditions, to pay part of the interest on loans raised in Britain by Dominion Governments for developmental purposes. For five years, where a loan i 3 approved, the British Government would assume responsibility for the greater part of the interest, but upon tho conditions that the loan would be in advance of normal expenditure, that it would bo for developmental work approved by the Government of the borrowing country, and that any materials purchased abroad by the borrower for the purpose of the work contemplated ehould be purchased in Britain. Mr Massey now announces that before leaving England he lodged an application under this resolution in connexion with a loan of foar millions, and that if the new Labour Government will "take tho " matter up and pass "the required " legislation," he will advise the New Zealand Government to take advantage of it. The change of Government in Britain may bring it about that the whole of the resolutions of the Economic Conference may be scrapped, but this need not be taken for granted, because the nuw Government has undertaken to consider tho resolutions, and there is much in' them which the Liberal and Labour parties can easily enough support. Tho proposal wo are considering may bo regarded by tho new Government as amounting to tho subsidising of tho Dominions by the British taxpayer. In a cons© it does, but it is very different from tariff preference in tho most important particulars. In the first place, Great Britain will receive in return for its subsidy un enlargement of it* trade; in the second place tho nu'widy wjil not involve any infraction of tho Frcetrado policy of Britain or lead in any way whates-cr

towards the imposition of Protective duties. There may be objections to the scheme from this end: it may tend to encourage unduly heavy borrowing and a too rapid expenditure on developmental purposes. This 13 a poinA Ehieh can be considered at leisure when Parliament is asked to ratify the Conference decisions. In the meantime the point of interest ia the attitude tho new British Government will take tip. From the British point of view there is nest to nothing to bo said against the plan, if we assume that it i 3 admitted to be in Britain's interests that mutual economic assistance between Britain and the Dominions is desirable. The proposal will therefore be something like a test of the sincerity of the Government's protestation, renewed by Mr J. H. Thomas in the statement cabled today, that the Labour Party regards the Empire as "a sacred trust which it "' must develop impartially and freely."