BARTER TRADE

Press, Volume LXXI, Issue 21581, 18 September 1935, Page 12

BARTER TRADE

"A POOR SUBSTITUTE"

COMMENT ON GERMAN ECONOMIST'S VIEW

Ail organised system of barter trade between Germany and New Zealand, such as that suggested in Auckland by a visiting German economist, Dr. Franz Isphording, might be of some benefit to the Dominion, but would be a very poor substitute for the normal course of international trade, according to Professor A. H. Tocker, professor of economics at Canterbury University College. Professor Tocker was asked to comment on remarks made by Dr, Isphording which were published yesterday in "The Press." _ Dr. Isphording explained that almost the only way in. which Germany could carry on international trade was on a barter basis, arid that she was particularly .anxious to take the products of Australia and New Zealand in return for German goods. The buyers of German goods in Australia and New Zealand would pay their money into the banks, and with this credit the wool-buyer would buy wool for the German market. He added that there were many! articles used here which were produced neither locally nor in Great Britain, and that for this reason a good arrangement should be possible. • "People who are talking about barter as an improvement on the ordinary channels of international trade are talking rubbish/' was Professor Tocker's first comment. "The chief interest I find in the statement by Dr. Isphording is the illustration which it affords of the appalling condition , into which world trade has fallen because of tariffs, quotas, and trade restrictions. The German position is perfectly clear. They want to buy New Zealand wool but have no means of paying for it unless we take their exports directly in return. "Cumbersome Way" "The proposal is that New Zealanders should buy German goods and pay their money into New Zealand banks," he said. "This money would be used to pay for New Zealand wool shipped to Germany. Presumably the German wool-buyer would pay the price of the wool shipped into a German bank, and that German money would then be used to pay manufacturers for the goods which they had shipped to New Zealand. This is an extraordinarily cumbersome way of conducting international trade transactions, but under the conditions it appears to be the best available. Its success depends on the ability of someone in New Zealand to secure orders for the goods which Germany has to sell, to organise shipment and delivery, and to place the money obtained in the New Zealand banks. Then German wool-buyers will be able to come to New Zealand and buy wool to the limits of the credits held, but no farther. "If such a barter scheme could be effectively organised at the New Zealand end, it would have the advantage on the one hand of including German goods in the range of materials from which our importers must select, and on the other hand of bringing new buyers into the market for wool. But as a means of facilitating international trade the arrangement suggested cannot compare with normal methods." Professor Tocker suggested that there would be some difficulty in organising a market for German products, which were practically unknown in the Dominion. There was some truth, however, in the statement that Germany could supply some goods which could not be obtained from Great Britain or from manufacturers in the Dominion.