BRITAIN'S RECOVERY

Evening Post, Volume CXXIV, Issue 26, 30 July 1937, Page 7

BRITAIN'S RECOVERY

EVIDENCE OF FIGURES

T. VOLUME OF TRADE

The-remarkable recovery-in the industry and commerce of Great Britain last year is emphasised by the Council of the London Chamber of Commerce in its fifty-fifth annual report, says the "Daily Telegraph." The report takes stock of the situation to see how far'the nation has travelled from the depths of the depression of 1932, and deals with the subject in relation to the last pre-depression year of 1929. By last year, the report states, there had not only been an amazing recovery from the depths of 1932, but production largely exceeded the output of 1929. If the wholesale price number is taken as 100, it had fallen to its lowest point of 74.9 in 1932, and from then slowly rose until it reached 82.7 last year. Moreover, wholesale prices were still substantially lower in 1936 than, they had been in 1929, bo that the rise in prices which had taken place was thoroughly sound and gave no cause for anxiety. "r.'The number of employed, which had been 10,220,000 in 1929, fell to ; 9.348,000 iri 1932, but for 1936 averaged 10,896,000, an increase of 676,000 over 1929, but 1,548,000 over .1932. The number of unemployed was 961,000 in 1929; by 1932; it had- increased to 2,178,000, whereas in 1936 it, had been reduced to 1,508,000. In 1929 the exports and re-exports from the United Kingdom were valued at £839,051,150, and tlie imports at £1,220,765,300; in 1932 exports and re-exports at :'£ 416,045,264, and imports at £701,670,061;' and in 1936 exports aftd're-exports at £501,135,145 and im- . p"orts at £848,935,895. Even cornspared with 1929, the difference in the volume of oversea trade between that year and 1936 was not so great as these figures indicated, prices being ■-considerably higher in 1929 than they were in 1936. Total bank deposits rose from £1,791,000,000 in 1932 to £2,142,000,000 in 1936, the injection of this new purchasing power having a marked effect in stimulating industry. EFFECT ON PRICES. The great increase in armaments which gained momentum throughout the world in 1935 and 1936 had already started the upward movement in the prices of the necessary raw materials, and by making an increasingly large call upon the world's iron and steel industries had stimulated the British industry, which had been assisted by import duties and cartel arrangements. A further stimulus was, given to the heavy industries when the British Government determined that it could no longer defer the renovation of long-neglected armaments. The. oroduction of steel rose from 9.Bf£J. "o tons in 1935 to 11,600,000 tons in ln'i-. this being more than 20 per cent. Loove the 1929 level, although exports of iron and steel were only half as great as they had been in that year. The building industry, ori':'the activity of which the recovery from the depths of the depression had.^ so largely depended, was also kepfat a high productive level by orders.-for new factories. ■■-■£•'■ •■■-' "■"■ .'. The stimulus given 'to industry generally, says the .report, is not to be computed-by the amount.of money spent directly and*4ndirectly'>in7^the carrying out of any^particular project, whether rehousing or* rearmament, because the men taken into employment for those purposes spend their wages over the whole., range of industry, necessitating more men ' being taken into employment to supply - their requirements, these men, in their turn, creating a further effective demand. A stimulus given to industry at one point is felt throughout its entire range;' The wages . now being paid to men to manufacture arms will be spent by them on consumption goods, so that the effective demand for such goods will be increased, whereas the output of those men will not be added to the- supplies awaiting consumption in the market. With this increased demand for consumption goods, unless supplies can be rapidly increased, there will be a tendency for prices to rise.