RECIPROCAL TRADING

Evening Post, Volume 63, Issue 63, 14 March 1924, Page 7

RECIPROCAL TRADING

RAISES SELLING PRICE

A^D LOWERS BUYING PRICE,

Some reasons why New Zealand should trade with Britain were given before the le Aro Advancement Association yesterday by this British Trade Commissioner (Mr. N. Elmslie). He said that l'■.*?"' .Zealand bought largely from Britain they would strengthen the buying power of the British markets, help decrease her taxation, .lower manufacturing costs, raise the price of floods New Zealand sold, .and decrease" the price of the goods bought. This only applied to trade with Great Britain " . tie remarked: "I do not think the fact is fully appreciated that, of all the countries New Zealand trades with, there is only one trading in her favour; that is Great ' Britain. In every other country she trades with they sei.! more to New Zealand than they buy from her. N ow Zealand has to "maintarn a large export trade in foodstuffs nnd raw materials. Great Britain is her best market. Price levels are the gov einmg factor of sea-borne trade to-day New /e a l ai ,d can .balance her interna--lonal trade accounts by increasing her sales to Great Britain through a transfer toher of trade that goes to foreign countries. Leaving out goods that come naro from foreign countries that Britain rcinnot supply, or iri which British prices «annot_ compete, I estimate that trade to the value of three millions sterling could be transferred to Britain to the mutual advantage of the Home Country and New Zealand."

'flic speaker said he did not believe there wiis.no sentiment in business. He marvelled at ths ties of sentiment that moved traders in New Zealand to place orders in Great Britain consistently, lor the reason that they knew they "were helping to alleviate unemployment distress at Home, giving an additional stimulus to miirr.ifimture, and helping Britain meet her international and domestic financial obligations. How r.dSintageous it was to New Zealand, from a financial point of view, was proved by the fact that, while 90 per cent, of the exports of New Zealand "were sold within the Empire, over,Bo per cent, of them were purchased by Britain. New Zealand had to undertake large expenditure yet in developmental works, and a big volume of money would have to go Home for material and machinery, as v.-ell us for the annual interest bill* He would not suggest that there should be a bias to push trade in a particular direction, except under special conditions, but Great Britain was the biggest buyer, and was looking for more trade from the Dominions. ■ VIEWS DIFI'KR. Taxation in Great Britain to-day, he said, was almost exactly four limes what it was in pre-war days, and the same applied to- the rates. These increases made manufacturing costs higher, pushed up prices, and directly checked business. _ Another factor was capital. Great Br^ra spent an enormotis proportion of !».- accumulated capital on the war. and unlike other countries, raised a lot of this by taxation. The effect of „ tills was still evident to-day. Many firms at Home were short of working capital, were unable to' extend, and unable to advertise. Many times be had teen asked why British, manufacturers did not send their men out here to advertise their goods. The fact of the matter was that many had not the money to do it with. The . Board of Trade recently, found, en going into figures, that Great , Britain had lost over 25 per cent, in volume of her export trade. This was a very vital fact, and what was causing the trouble at Home at present. It was said that Great Britain was losing trade, had lost its grip en the world's markets, and was being beaten by its competitors. These (bines were not true. The trade of the worl<l was lower by 30 per cent., and while the trade of Britain was down, it was not down to that extent. Iti_ proportion. Great Britain was doing'a little more than she was before the war. If. that was the ease, why was she suffering: unemployment severely? The' reason was that many of the other countries had important home markets, and she had not. The United States had enormous home marj.ke's, and its export trade was simply a small surplus. Great Britain had ■concentrated on manufacturing for world markets, and one worker in. three was working for export. If the volume of export trade was reduced "it mattered little to the United States, but a lot to Britain.

Britain had to get more trade somewhere. If the volume of trade could bo imi=asccl and taxation spread over larger businesses, that was going to lower the cost of production, efc. To assist in increasing British trade to-day meant helping to lower the price of* British goods. The Trade Commissioner said that Europe was now taking -.34.2 per cent, of British exports, as compared with 34.4 per cent, in 1913, and the four self-governing Dominions were taking 18.18 per cent., as compared with 17.5 per cent; in 1913. The price level of imports had increased by 51 per cent., and that of exports by 92 per cent. This meant that, for a given volume of produce sent out, New .TeaJand or any customer of Britain could only get three-fourths cf the volume in manufactured goods. This was the factor all should concentrate on. It was a difficult proposition, and it was a question by how much New Zealand could help. TARIFF WALLS. Dealing with increased tariffs, the speaker said tariff was considered to !?Si;e increased, trade. It was true that many countries had increased their tariffs since the war. Tariff interfered with the natural course of trade", and disturb-' ed the markets. It acted temporarily, but once there was a settling down itdid not have much permanent "effect. Actually the imposition of a tariff did not affect trade at all. "Take the case of the United Slates," said Mr. Elmslie, "which has put. up one of • Iho highest tariffs' ever .imposed. J'n 1922 | the volume of 'British manufactured got V. going into America was as large as it has e-ver been in any year in history. That was the effect of the most scientifically-devised modern tariff. So tliH ultimata elt'oet was not to check imports into the country, but to raise values in the country itself." He Jilieved in leaving trude to take its own natural channel. Kvery country had goods it was naturally titled to | produce, and if every country was alkwed to interchange wilh every other country aild leave trade free, lhal was the best in,the long rua, \