SELLING AND BUYING

Dominion, Volume 26, Issue 150, 21 March 1933, Page 6

SELLING AND BUYING

Australia Cannot be Fully Self-contained WORLD’S PRICE-LEVEL / Although of the opinion that Aus' tralia’B secondary industries have been a great,factor in assisting her to withstand the depression, by keeping many people in work who otherwise would have been unemployed, Senator the Hon. W. Massy Greene, Assistant Federal Treasurer, who arrived in Wellington by the Maunganui from Sydney yesterday, is of the opinion that a wholly self-contained Australia is not practicable, and that if she still wishes to sell goods overseas she will have to import also. “It goes without saying that goods we export can- only be paid for by goods we import,” Senator Greene said yesterday in the course of an interview. “Our problem in Australia has been to find sufficient money overseas to pay for what we have to import. And until quite recently there have been a large number of embargoes on imports and penal customs duties for a definite object of maintaining the balance of trade at a point where we would have sufficient London funds to pay for what we import, and to pay for our overseas interest and other overseas obligations, both public and private. Senator Greene said that Australia s imports had "been curtailed very materially compared with the period before the depression. Australia’s London funds had been entirely absorbed with the imports plus payments for public and private obligations. It seemed to him that Australia to-day was buying as much as she possibly could from overseas. Previously she was a very heavy borrower on the London market; now that borrowing had ceased. These funds, of course, were used to purchase goods, and these loans were transferred to Australia In the form of goods. Now that the Loudon money market was not open to Australia, this money was not available for goods that sne was in the habit of buying, and consequently, Australia, for funds abroad, was confined entirely to surplus exports, whatever they might be. But,- Senator Greene continued, the only thing that would enable Australia to rehabilitate herself completely was a rise in the price level of primary products. This could only be done by International effort. Up to a point, a managed currency could assist in raising the internal price level of any individual country, and assist in giving a better adjustment between internal debts and prices, but a better world condition could not be obtained by that means. The only thing that would give a better world position was ] the raising of the world price level. It was very hard to say what was going to come out of the preliminary talks between Britain and the United States. They might pave the way for a final settlement in regard to international debt. This, Senator Greene considered, was the first step that must be taken before any concerted action could be taken in raising the. price level. “Once that question is settled, and assuming the settlement is of a satisfactory kind, then, I think, it is possible for the great trading nations of the world, through the central banks, to take concerted action, which will, not rapidly but gradually, restore the price level to an extent which will, at any rate, make primary production profitable once more.” Senator Greene added that the same problem was facing every nation. Primary industries, which were the basis of the world’s prosperity, were unable to carry on at a profit. A point, would have to be reached at which primary producers could operate at a profit before the world could start to function in a normal way again. iiiiiuiiiiiiiiiiiitiiiiiiiiiiiiiDiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiuiiiiiiiiin