NOTES OF THE DAY

Dominion, Volume 26, Issue 97, 18 January 1933, Page 8

NOTES OF THE DAY

Mr. Stanley Bruce finds that Lancashire cotton manufacturers and Yorkshire woollen manufacturers are concerned at the extent ot Japanese competition and Japan’s ability heavily, to undersell competitors, despite tariffs. One cause, whose operation cannot be moi e than temporary, is the heavy depreciation of Japanese currency in terms of sterling. The yen is normally worth about 24J>d but is now quoted around 15d, the extent of depreciation being about 40 pe. cent. Here is a case of a country enjoying an abnormally hig.i exchange rate and. under cover of it, enabled to cut prices. Ihe effect on world prices has been depressive. Possibly, the. high exchange rate quoted by Australia has tended in the same direction in the wool, butter, wheat and apple markets. In fact high exchange is a game that more than one can play at. Stability is what the woild needs to-dav— stability and the confidence that goes with it. '* * * *

Two proposals affecting interest rates were befoie the iatnieis meeting yesterday. The first, which was carried, urged, the Government to reduce interest rates in conformity with reductions in other countries. The second, which was referred to the Parmeis Union Executive,' proposed that a mission be sent to Great Britain to arrange for conversion of New Zealand loans to lower interest rates. It niay be hoped that this second proposal will be shelved until something is done about the first. New Zealand cannot go to London cap in hand unless she has first passed it round the Dominion. And m the local case the Government must give a lead. . At present it. is setting a high standard and others seeking financial accommoclativ must bid higher. Incidentally it would have been better had the original wording of the resolution been retained, that the Government should use its influence to bring about the desired result, a sounder proceeding than prescribing arbitrary reductions by force of law. 1 ’ * ' * * *

Following upon the Imperial Economic Conference at Ottawa, two schools of thought emerged in Great Britain as to the result. One held, and it was our expressed view, that the agreement reached within the Empire would spur other countries to seek reciprocal trading treaties. Imperial co-operation was to be a stage on the way to world co-operation. The other school, the free traders, declarer. Ottawa had destroyed all hope of wider economic co-operation. Britain had tied herself up with the Dominions in such a way that she wano longer free to treat with foreigners. These critics forgot that foreigners had not bothered to negotiate while the British market was free, open and unprotected. The proof of the pudding lies in the fact that ever since Ottawa a procession of foreign nations has approached the British Government seeking to make a tariff deal. A message published this morning sets out an impressively long list. While Britain held to free trade she was defenceless; now she possesses a lever and it is working.