WORLD ECONOMY

Dominion, Volume 37, Issue 264, 4 August 1944, Page 4

WORLD ECONOMY

New Zealand’s Future Part FINANCE MINISTER’S SUMMARY New Zealand’s involvement in international economic events, and her moral and material commitments toward the reconstruction of a war-ravaged world were summarized in an address by the Minister of Finance, Mr, Nash, to the Dominion dairy conference in Wellington yesterday. No conference had greater implications, he said, than the recently concluded world monetary conference. Dealing with circumstances which he considered, from the international point of view, affected the primary producers of New Zealand, Mr. Nash recalled the lend-lease agreement of 1941 and the subsequent agreements between the United Kingdom and the separate Dominions with the United States in connexion with mutual aid. Article 7of the mutual aid or reciprocal aid agreements, he said, had an important feature for primaiy producing countries. This stated that there should be non-discriminatory treatment of the trade of the respective countries of the world. It was at first inferred from that that the United Kingdom and the Dominions would abolish their preferential tariffs, but since then it had been stated by Mr. Churchill that it was known to America beforehand that the term non-discriminatory did not mean the abolition of preferential trade within the British Commonwealth. .It had been agreed to go further into the whole comnfercial policy of Britain and the United States. There had been discussions in London on commodity contracts and cartel policy. Without any publicity being given them, these . had taken place with the idea *of determining both the United Kingdom and United States policies. Then there would be a United Nations’ conference. World conference stage had already been reached on one phase—the monetary aspect—at Bretton Woods. That conference was probably one of the most important in history from the world point of view. No conference had greater implications. Neither the British nor the New Zealand Government was committed to what had come out of that conference. It had been preceded a year earlier by the world food conference at Hot Springs, Virginia, where it had been stated that one-half of the world’s population had never had enougtt to eat. The constitution of the organization arising out of that conference was now almost complete. The Government of New Zealand, he expected, would adhere to it, and already a contribution had been made to the build-up of what was to be known as the ‘Tood and Agricultural Organization of the World.’ One Per Cent, of Income. It was proposed that each Government should allocate 1 per cent, of its national income, and, on our Estimates, New Zealand’s contribution would be tz.ouu.uuu. The United States would contribute over one billion dollars, Britain £80,000,000 and Australia £12,000,000. However, it had been agreed that in every case only 10 per cent, of the contribution should be in overseas currency, and the balance in the products of the particular country. That meant that New Zealand would have to find £260,000 in actual cash lor the U.N.R.R.A. , . The third world conference of relative importance was that of the T.L.O. at Philadelphia, continued Mr. Nash. It could be said iu a simple sentence that “poverty anywhere endangers prosperity everywhere.” To maintain their economy they had to take steps to lift the living standards of other countries. Details were worked out at the monetary conference to ensure, as far as possible in human ingenuity, the avoidance of slumps in the future. That did not mean that they would be avoided, but their intensity and effects would be reduced. New Zealand had such a good balanced economy that he hoped, in post-war years, she would not have to have recourse to the world monetary fund being established. Each countiV it was proposed, should make a contribution to the suggested pool of eight billion dollars, on the basis of 10 per cent, in gold' and the balance in its own currency, New Zealdnd’s contribution wits fixed at 50,000,000 dollars, and (bat might run into anything between £500,000 and £700,000 in gold. Though it still had to be ratified by their respective Governments, the United Kingdom. United States and Russia had reconciled their points of view. The establishment was being set up to’ keep as even a balance as possible of world trade when depressions or booms were likely to upset parity. The Bank for Reconstruction and Development was exclusively inside the terms of its name —the provision of money by way of loans to countries which had been occupied and then liberated, for the reconstruction of their economies, so that they could set goods to exchange for our products. The potential. from the production point of view, of some of the South American countries wns unprecedented. Mr. Nash said he firmly believed that, outside some flaws to which he would possibly object in the proposals., this was the greatest advance yet made in human history to expand production and raise living standards. He was satisfied that those conferences, if they had the vision to implement their work, would be more fruitful in building better conditions, in this and other countries than anything that had ever been done. It was like Alice in Wonderland to imagine that we could get on in this world by ourselves. It was not possible. (Cries of “Hear, hear.”) He had heard people say: “Let's get rid of the world idea —” A voice: Insulation. (Laughter.)

“Yes, insulation is all right to stop some of Hie shock coming to countries—but not isolation.” said Mr. Nash. “There is a difference. These conferences arc to insulate the world against the shocks that come from faulty economics. There is nothing inside any of these proposals to interfere with living standards in this country, and there is no reason why they should not be progressively expanded. If we were wise, we ultimately would see that none of us could live to ourselves.”