TRADE WITH EUROPE

Evening Post, Volume CXVI, Issue 33, 8 August 1933, Page 10

TRADE WITH EUROPE

INDIRECT IMPORTS

CZECHOSLOVAKS CLAIM

"Evening Post," August S. In common with some other European countries and in some measure with the •United States, Czechoslovakia feels at a disadvantage when consideration is given to its trade with the British Dominions. In the trade returns of New Zealand, for instance, for the six months ended June 30' last, the New Zealand imports from Czechoslovakia are set down in New Zealand currency at £22,093, . according to country of origin and the exports of New Zealand produce to Czechoslovakia are set down -ai £i, or a tojal, including re-ex-ports,'of £12. But.in a communication on this subject of trade, as between Australia and Czechoslovakia, made to the Wellington Chamber o£ Commerce, Dr. Kuraz. Consul-General for Czechoslovakia in Australia, has pointed out how such returns as those quoted for New Zealand are apt to be misleading. Addressing the Chechoslovakian Chamber of Commerce for Australia, Dr. Kuraz said the public needed' to appreciate the fact that his country had to import everything indirectly through sea-ports in other countries which" are thus credited with these imports Australian official statistics record merely such goods as have been exported directly from Australia to Czechoslovakia. These goods-chiefly wool-re-present, however, only about 5 per cent, of all the goods of Australian origin that his' country buys. In other ■ words, only about 5 per cent. of all the goods of Australian origin bought by .Czechoslovakia are recorded in the Australian Official Statistics under the Heading Exports, to Czechoslovakia"; the remaining 95 percent, are credited to other countries such as Great Britain, Germany, Belgium, and France. ... • Australia was actually selling more m wool to Czechoslovakia than the total value of the'latter.- country's exports to 'Australia. Dr. Kiiraz adds that researches in 1930 by the International Labour Office at Geneva had shown in comparisons fcetween real wages paid in various countries that, with Great Britain s wage-level taken as 100 per cent., the real wages paid m Eolland are 89 per cent., in .Germany and in Czechoslovakia 77 per cent., in Poland 68 per cent:, in France 59 per: cent.,; m Austria 53 per cent., in Italy 51 per cent., and in Spain 49 per cent. He also referred tb the stability'of the Czechoslovak fcurrency, and mentioned that the gold isover of the Czechoslovak crown is about 40 per cent. • . AN ECONOMIC FALLACY. Mv P Lazarus, president of the Czecho■lovakian Chamber of Commerce for Australia, stated at a .recent meeting ofc that body in Sydney :-"I have, had it put to me recently that when wo :m Australia buy manufactured goods abroad we get the goods and the exporting country gets the money. When we buy the manufactured goods at home, we get both the goods and the money. . , ~ "T share the opinion of some of the leading economists of the world that this ie a fallacy, for if we buy goods abroad ,we have to pay for them, but we do not nay for them with money. Ultimately, they have to be paid for in the currency of the country where they were made; apart from temporary adjustments through movements of gold we cannot get command of fhat currency • except by shipping abroad goods that we ourselves have made; we get the. foreign countries goods and they get ours. By buying, goods •broad we are employing foreign labour, paying it wages w.eek.by week. As this case has been answered.'the foreign labour does not work for us for nothing; they work for us only because, and so long as we make and send to them things they want; if we employ them, they employ us'just as truly. The idea that as a piece of permanent policy it is good for a nation to cut down imports m order to keep ite money in its country,!? .just a silnple fallacy and no more. If- money in this ■ connection .means the particular currency of the. country—sterling or dollars or francs—that stays naturally in the country because it is practically of no use, outside the country,;- it lan.t legal tender anywhere else." MIDDLEMAN HAS THE KEY. Mr. Lazarus also stated that Dr. K. Englis, a leading Chechoslovakian economist, formerly Minister of Finance, had attributed the present world depression in trade to tlie problem of prices. Dr. Englis held that the-fall in prices should fte accompanied by'bigger sales, leading •'&Sally to stabilisation at a lower level; products would then be sold cheaper and in larger quantities, and the.general standard of living would improve. Un-,-fortunately, this was not yet happening, (?8r the standard of living had, so fax, i-emained practically unaffected by the fall in the price level. While the indices «,f sensitive, wholesale, industrial, and food prices had receded considerably, the index &1 prices paid by the consumer had remained stable. The fall in the level of iirices had not reached the consumer^ Beween him and the level of wholesale ■rices there was a great *ap which helped b prolong the crisis. A corresponding .eduction of:priees f°r tlle consumer would ' tend to increase the demand, at the_ same time;:s^imula'ting'production xmtil it becomes profitable. The middlemen who distributed tbe • goods hold the key to the whole problem.