PROSPEROUS COUNTRIES

Evening Post, Volume CIX, Issue 120, 25 May 1925, Page 7

PROSPEROUS COUNTRIES

VALUE OF EMPIRE

MARKETS

EXAMPLE OF AUSTRALIA AND

NEW ZEALAND

(I'llojl ODK OWN CORUESPONDENT.)

LONDON, 9th April

" The Times " (Trading and Engineering Supplement) contains a very informing article on the capacity of tho Dominions us purchasers of British-made goods. The writer, who is described merely as "A Correspondent," notes that since the Imperial Economic Conference held in London in October, 1923, the value of the Dominions as markets for British manufactures has become a little more clearly realised in this country.

"Most people who concern themselves with trade and commerce now recognise," he writes, "that the Dominions purchase from Great Britain more per head of population than any foreign country. Habits of thought ate, however, conservative, and British commerce has, for many years, been impressed by the importance of markets where masses of population can be relied upon to provide purchasers. This habit is probably due to the great importance of the export of cotton manufacture to India and China, but whatever its cause it seems to have made it very difficult for the average citizen to realise that a sparsely populated country like Australia is the second largest market in the world for British produce' and manufactures. The causes that have prevented the British people from realising the present - value of Empire markets also hinder them from visualising the almost limitless potentialities of those markets in the future. Increased trade with Russia, with China, or with South America appears to many to present a more hopeful remedy for unemployment than trade with the few millions of Britons scattered in the Dominions. Empire development is, indeed, accepted as a necessary part of British trade policy, but if there is to be any real driving force behind the idea it is necessary for the public tc become vividly aware of the present value of the Empire markets.

NATURE OF EMPIRE TRADE. " The value of the Dominion markets to British industry is further accentuated when -we. consider the nature of the trade with Australia and New Zealand. Whatever views may bo held as to the relative historic importance of the export of coal and manufactured .eoods in building up the commercial position of Great Britain, there can be little doubt that in tho present state of unemployment the export of fully manufactured (roods provides moi-e employment to British labour, skill, and capital than the export of raw materials. In 1924 93.9 per cent, of the British exports to Australia were manufactured goods, and the proportion of manufactured exports to New Zealand was 87.5 per cent, in the same year the imports from these Dominions consisted wholly of foodstuffs, raw materials, or of such meals as pig lead, copper bars, etc. WEALTH MORE DIFFUSED.

"What are the reasons that have made Australia arid New Zealand such valuble markets to Great Britain? The correct answer to this question is of great importance to British industry. Australia and New Zealand are- prosperous countries, but possibly their present 1 wealth is not greater than that of the Argentine and Denmark. The distribution of wealth, on the other hand, is more general in these Dominions than in most other countries.

"In 1923, 63 _ per cent; of ■ th* Australian, population possessed Savings Banks accounts, with an average deposit of £47 13s. In March, 1924, 64 per cent, of New Zealand's population had open savings accounts with an average of £64 Us 3d to the credit of each depositor. The high level of general prosperity which is illustrated by these figures accounts for the purchasing power of these Dominions, but in itself does not explain why Great Britain should provide over 50 per cent, of their entire imports when she only supplies 22.7 per cent, of the Argentine imports and 18 per cent, of the Danish.

"The fact that over 90 per cent, of the population of Australia and New Zealand are of British stock does, however, pai^ly explain the British predominance in their trade. In both Dominions, the Governments, municipalities, and large trading organisations habitually give buying preferences to British goods over and above any preference afforded by the Tariff.

"The value of preference, either of a baying or of a tariff nature, depends,"' the writer points out, "on the severity of competition which the preferred goods have to face. At the present time there is almost daily evidence of the increasing industrial production in America, Japan, and on the Continent of Europe. The President of the Board of Trade has stated that the .volume of British exports ia 20 per cent, down when 1924 ls compared with 1913; for the same period the volume of French manufactured exports is 50 per cent. up. American manufacturers still continue to be absorbed by the demands of their home market, but if only 2 or 3 per cent, of their enormous production should be deflected into tho export trade,'the effect would be felt throughout the world Japan has already ousted Great Britain irom the position of chief supplier of cotton pieco goods to China. In prewar days the British export trade had to meet heavy competition from Germany and from tho United States of America; m tho future it appears certain that competition will come • from many other countries.

Great Britain has. up to the present time, retained the lion's share of the sheltered markets of the Empire. If she is to continue to do so, the first essential is that her manufacturers, her merchants,, her politicians, and in fact the majority of her people, ■ should understand the present value and the future possibility, of what Mr. Ramsay MacDonald recently described in the House of Commons as 'that promising semidomestic market, the market of the Dominions and Colonies."