The Press Thursday, November 24, 1932. British Trade Balance.

Press, Volume LXVIII, Issue 20712, 24 November 1932, Page 8

The Press Thursday, November 24, 1932. British Trade Balance.

Cable messages during the last few days and this morning havo drawn attention to the low exchange level oi sterling, attributing the latest decline largely to the uncertain prospect of an extended war debt moratorium, though iu part to heavy seasonal payments. But with these causes must certainly Ik: associated another, the obstinately unfavourable character of the tiade balance, which presents the iundamental problem of the British economy. In a message on Monday it "\\ao ieported that tho trade figures for ten months of the year threaten a heavier adverse balance than last year —£ 90,000,000, compared with 75,000,000; and tho tigures have the greater interest because they mean that the general and special tariffs on imports, together with the depreciation of sterling, have been ineffective, at least in swinging tho balance in Great Britain's favour. The position is_ of course not simply that ordinary imports have exceeded ordinary exports, because that has been a normal feature of British trade for many years. The visible deficit has in . the past been covered and exceeded by the huge total of "invisible" exports, including interest on oversea investments, shipping freights, and other services; and it is here that Great Britain has suffered. While the " visible" trade tigures, in and out, have fallen sharply, the adverse balance has not varied much; but defaults and other shrinkages in oversea investment receipts and the tremendous decline of the shipping returns have brought down the "invisible " export total until it is no longer sufficient to redress the balance. further, although export trade is assisted by the depreciated value of sterling, debit balances are correspondingly harder to meet. Superficially it does not appear difficult to mend this bad state of affairs. Great Britain must either import markedly less or export markedly more, or both. But the remedy, so simple in theory, is hard to apply, for two reasons. Great Britain is necessarily a heavy importer, whose purchases are mostly food or raw or semi-manufactured materials for her own lactones. The quantity of " luxury " or dispensable ' imports is not nearly so large as iw frequently thought. Second, British exports consist largely of manufactured items for which her distressed customers have necessarily cut their demands and in which she now meets increasingly severe competition. But that the problem must be solved goes without saying, because failure there can only be the prelude to total failure. One obvious step is to reduce the national overhead and industrial costs with it; and this, no doubt, is why political thought in England is turning to fresh economy. Another step, equally obvious, is to press on with that industrial reorganisation which began too late, after the War, and is still far from complete. But broadly the truth is that, much as independent effort may do, the balance of British trade will be precarious at best until her debtoi's become solvent and her customers more prosperous.

creation of the new State of Manchukuo have aroused such a wave of patriotic feeling in Japan and have entrenched the militarists so strongly in popular favour that Admiral Saito and his colleagues cannot with safety abandon au attitude which they seem to have adopted against their better judgments. The tragedy of it is that there is no real incompatibility between Japanese ambitions in Manchuria and tho Lytton Commission's scheme tor guaranteeing Manchuria s integrity. I lie Lytton Report carefully emphasises the special nature of Japan's interests m Manchuria and the justice of the claim that they must be more adequately safeguarded. Nowhere in the Report is there any tendency to minimise tho weakness of Chinese administration and the consequent insecurity of foreign traders. The Japanese Government, 011 the other Land, lias said repeatedly that it does not intend to annex Manchuria and desires no more than tho establishment of stable and effective government. There is no need to doubt the sincerity of these professions. The superior racial vitality of the Chinese makes a Japanese colonisation of Manchuria impossible, while a 'permanent military domination of such a vast and populous area is, for financial reasons, out of the question. Japan's interests in Manchuria will never be secure until she has established friendly relations with China; and that will not happen until both Powers accept, the wise counsels of the Lytton Commission. China is ready to accept them; but Japan, blinded by an illusory success, is not. Though the League Council is not likely to induce her to relent, circumstances may. There has already been a serious and expensive revolution in Manchukuo, Japan's trade with China has fallen off alarmingly, and the Government finances, partly as a result of the Manchurian campaign, show a perilously large deficit,

Parliament and the Press. The reasons against the broadcasting ol' speeches in (lie Mouse oi. Representatives arc so strong that, but i'or one foolish phrase embodying a foolish eliarge, it would not bo necessary to comment on the question addressed to the Postmaster-General by the member for Mat a ura yesterday. Mi" McDougftll asked whether it would not be possible to instal a microphone, so that people could " hear what members of "Parliament actually say, and not •' what the Press state they say." Politicians have been known to protest that they have been ruisreported, and close observers have been struck by the coincidence that they are generally in a fix when they do. Even, accidental misreporting has seldom been proved; deliberate misreportin?, never —because it does not exist. It lias remained for Mr McDougall, however, to magnify and generalise the charge. The public does not .hear what members say, but false versions of their speeches in the Press —"whether falsified by stupidity or malevolence or both together Mr McDougall forgets to indicate. If lie is honest and fair, ho will say which he means, and he will also support his charge with such evidence as he can produce. But he will be able to produce none that can justify him in this attack upon the Dominion's newspapers, which are in nothing more careful than in preserving the integrity of their political reports; and he will be lucky if he succeeds in producing proof of even a single serious slip in a single one of them. What be has produced already is one more interesting example, an addition to a long, fantastic series, of his own recklessness as a political speaker.