PROBLEM OF THE ECONOMIC CONFERENCE.

Dunstan Times, Issue 3380, 27 June 1927, Page 2

PROBLEM OF THE ECONOMIC CONFERENCE.

As the date of the Economic Conference at Geneva draws nearer one seeks to discover whether it is possible to 'anticipate its results. Obviously, with so vast and complicated a field to survey, its findings cannot but be quite general in their expression, and that will not carry us far. There is, however, this to be noted, that precisely the same scepticism as to prncli cal results was experienced prior to ilje Brussels conference on currency and public finance. In spite of pessimism Brussels had its effect, as witness a world more stabilised than at any time since the

war. ■ Undoubtedly the greatest issue will be tariffs. Tore is no longer the need for tariffs conditioned by fluctuating currency. That trouble at least has been cleared away. .The extreme nationalism of the post war period which manifested itself in more and bigger tariffs, has gradually weakened, but still has to be reckoned with. These barriers have to some extent gradually been modified. The prohibitions have given place first of all to license systems. Later on the license systems have disappeared, and now the international commerce of Europe, and indeed of the world, is restricted broadly only by the existing tariff barriers. The idea of a United States of Europe will inevitably be raised, and as inevitably the British position with regard to a -United Europe. But these tariffs, handicaps to trade, are no joke. As compared with forty years ago the European tariffs have increased beyond imagination. Germany’s 490 items is now 2300. Belgium in 1894 had 235 items; in 1925 it had 3038. Italy had 736 in 1888; it has now 3574. As usually happens, the smallest countries go in for this sort of thing with greatest detail. Haiti heads the list with 13,800 items in its tariff. The x’ednctio ad absurdum of protection! And these tariffs are constantly being changed, so that goods in transit may be found on arrival to be so heavily taxed as to he unsaleable. They have become increasingly detailed and complex as the figures just cited go to prove. Mr W. T. Layton, editor of the “Economist,” describes Europe to-day as having more tariffs, fluctuating tariffs, tariffs put on nominally for fighting purposes, but in effect becoming protective tariffs, and a general rising of the level of tariffs. This, to the freetrader, is a veritable nightmare; and even the nationalist supporters of' protection at all costs are beI ginning to see that some halt has to be called. The volne of the Economic Conference will mainly be in the pushing home to the representatives of all nations that a system which may have its merits to one individual country is in the long run had inasmuch as the brake put on production leads to all round impoverishment. What, then, is to bo done? There is the suggestion of those who regard the industrial evolution of America .is a menace to Europe’s economic life, that all the countries of Europe should adopt the. same tariff and bargain collectively with the United States to reduce the American tariff. That, in the view of (he editor of the “Economist”,, is a very Utopian idea. The re-division of Europe by the Paris Treaty, has created special difficulties; every one of the old Secession States was at first extremely anxious to safeguard its economic independence. The textile industry of Austria ami Czecho slovakia was cut across and the intense nationalism which set up protective tariffs has led to reduplication of factories on both sides and new national boundaries. Austria, it is understood, will bring forward the suggestion that certain countries should agree that there should be a certain maximum rate for all commodities in the tariffs of countries adhering to a common convention; who would undertake that their tariffs should not include any rate in excess of, soy, twenty to thirty per cent. ad. valorem. What, at bottom, has made the tariff idea retain its hold so universally is that it gives a people a senso of security and of independence. The atmosphere in Europe. having gained to a certain degree a fooling of political security, its people may be embulcfcned to throw down, or at least lessen, some of the barriers to international trade. The increasing need for some means of counteracting the tariff handicaps to trade Isas already maul-, fested itself in widespread desire for special international trade agreements, hut , (hey have not been a conspi 'uous success. Will the Conference attack the problem in the direct way and recommend reduction of tariffs in the form of commercial agreements, or at least decide that existing tariffs shall not he increased, or that no change of tariff shall bo made until after a certain minimum period has elapsed ? There is not wanting too a suggestion fmm the free trade side, namely, that certain articles, cotton, wheat, foodstuffs, and certain other commodities which are necessary in all nations, should be free from tariffs. What certainly is a hopeful sign in the auguries for the Conference is the keen interest being taken by industrialists. It is alleged that industrialists have not, for tlie most part, been accustomed hitherto to take so international view of affairs as the bankers have. But the outlook of the industrialist is perforce undergoing a great change as certain intermit ion trusts and cartels, and the Conference is in lino with a fairly widespread tendency for manufacturers of different countries to get together. The more they and the bankers and the politicians get together, the better they will realise that their interests arc not exclusive and that tho national welfare is the business of all three sets of people, and the more chance there will be of some betterment of world conditions. It is not yet clear whether in onr country —as witness the industrial effect of the return to llic gold standard —the change dictated by the bankers was sufficiently considerate of the manufacturing interests of this, which is predominantly a manufacturing count rv.