FOUNDATIONS OF POLICY

Evening Post, Issue 60, 11 March 1936, Page 10

FOUNDATIONS OF POLICY

The more political partyism changes, the more it continues to be the same thing. In Opposition a party has ideas for the creation of wage-standards; in office it realises that while it can create standards it cannot create work—even the framers of Mr. Roosevelt's 4880 million dollars spending scheme admit that. Again, in Opposition a party has ideas for the creation of guaranteed prices; in office it realises that while it can, by several devices, control prices up to a point, it cannot control markets, and certainly not external markets. ', Between the lines of the speech of Mr. D. G. Sullivan (Minister of Industries and Commerce) to the Chamber of Commerce may be detected a recognition of the fact that no Government can treat the markets of another country as its property (except by war, hence one of the reasons for war) and that any exporting country's price-con-trol or price-assisting policies must be built upon an uncontrollable factor. At first glance, the reformer asks himself: "Can I raise the home prices of what is exported?" But when he gets into the question and sees what other Governments are doing; he asks himself the prior question: "Can I export at ' any price?" In other words, a priceassisting Government finds that exports are no longer purely a question of price. A Japanese exporter may find his price too low for the customer's satisfaction. Another exporter may find his price too high. A third exporter may find that for defence reasons his customer wishes to reduce importing, and that it is not a question of price but of national existence. In the international situation existing not only in Europe but in Asia the future of exports is politically as well as economically uncertain. Mr. Sullivan told the Chamber of Commerce that "this tendency for restrictive trade is world-wide." He notes here, an improvement, there a retrogression; but, on balance, "it is not altogether a matter of choice as to what trade policy a country adopts." The basis of any price policy is ability to sell; and with Great Britain paying "increased attention to agriculture," and with j chronic adverse trade balances in certain markets that have been looked on as alternative markets, the whole foundation of any price-assist-ing policy is a floating foundation. We use that phrase advisedly, because experts tell us that a floating foundation can be, in certain circumstances, a.very valuable one, but that depends on the judgment and skill of the builder. As Minister of Industries and Commerce, Mr. Sullivan may prove to be a very successful builder. His speech to the Chamber of Commerce shows that he has had a good look at the foundations—the first essential in a builder's task—and realises that New Zealand can no longer rely solely on one unlimited market in the country that is'our creditor and fatherland, but which is unfortunately separated from us by many thousands of miles of vulnerable sea and air routes. When Mr. Sullivan, the far-seeing builder, has established the foundations (by such means as reciprocal agreements in various parts of the world) and has built the first storey, the decorators of-the second storey will be in a much better position to draft theprice-texts to hang upon the wallst* Unfortunately Mr. Sullivan is reported as saying that his price agreements will be\"a long and involved process." Still, he certainly seems to be groping after the notion of "first things first.'' The speech of the president of the Chamber (Mr. McCaul) amplifies the Minister's address by specifying isorhe of the difficulties, such as the "most-favoured-riation" principle. He states, that the tariff advantages in New Zealand bought by Belgium from New Zealand, at the price of tariff concessions, to New Zealand in Belgium, became available to all countries enjoying the benefits of-a "most-favoured-nation" treaty binding on New Zealand. Thus he raises the question whether the future of trade is to be based on a series of bi-lateral bargaining trade treaties between pairs of countries coming together for that purpose. It is not an easy question. But it is not as difficult as adventuring into price experiments. Spade-work on trade itself should precede price experiments with exportable articles. In exploring the spade-work to be done, Mr. McCaul and the Chamber are j approaching the problem from the practical end.