CHAOS IN TRADE

Evening Post, Volume CXXVIII, Issue 42, 18 August 1939, Page 8

CHAOS IN TRADE

Socialists have been accustomed to deride the unplanned trade of private enterprise as chaotic, with no order or method or system. But importers who are experiencing the practical difficulties of controlled trade will say that private enterprise was by comparison simple and ordered in the highest degree. The further control is carried the more complicated it becomes. The statement issued by the acting Prime Minister (Mr. Fraser) today and a cable message from London show that control is to be even more rigid than (formerly. Not only the kind and volume of imports are to be subject to Government orders, but also the time and method of payment. Having obtained permits to import, traders i will now have to wait their turn for funds to pay for the goods and, unless they can make arrangements with exporters to grant credit, this may lead to exasperating delays. This is probably no worse than the experience of the past few months, when traders have found some import licences were useless to them because they did not confer any right to the requisite sterling funds. In fact the new order may be considered an improvement, since it substitutes for uncertain and indefinite delay a system of priorities with an indication of the probable time of waiting; but it will not solve the problems confronting the business men whose work calls for orderly and certain arrival of goods. In explaining the new method, Mr. Fraser admits that "at present import licences are in excess of the amount of overseas funds immediately available and importers have been handicapped by the uncertainty as to when overseas funds can be provided." To overcome this imports have been classified in groups, according to importance apparently, and on this classification priority in the use of funds is determined. It appears, however, lhat funds may not be available for all imports by the end of December, and some may have to be carried on into next year. The one satisfactory feature of the new arrangement is the point stressed by Mr. Fraser, "that the remittance authorities represent an assurance from the Reserve Bank that overseas credits will be made available to importers in the particular months indicated in the authorities." This assurance will enable shipment to be arranged on the date stated or perhaps before where importers can agree with exporters to bridge the gap until the funds are available. The export credit facilities will also be available to enable an exporter to obtain an advance on the payment. But all this will involve making special arrangements and will add to expense for interest I and insurance where a guarantee is : obtained. The priorities governing the Reserve Bank order of remittances may be better than catch-as-catch-can confusion, but they will yet present many difficulties. No general system of priority grouping can meet the special needs of business. A commodity may be in an unimportant class—and its arrival deferred accordingly—and yet may be urgently required because its use is bound up with some process of production. The Government appears to perceive this, and Mr. Fraser states that the arrangements will be flexible, having regard first to the national interests of the Dominion and secondly to the "relative urgency of the needs of individual importers so far as they can be judged on the information^ available." What may be anticipated is that there will be many requests for more favourable treatment. In judging these we do not see how any Government authority can give full satisfaction, for an encyclopaedic knowledge and experience in all branches of production and trade are needed. ■■~•. Generally, the new arrangements prove three thing?: First, it is evident that Government control and planning are not the simple and desirable processes that Socialists have claimed. In fact, they are cumbersome, costly, and tolerable only in a pressing emergency. Secondly, it is clear that the country is up against just this emergency. Export credits have slightly cased, but not removed, the difficulty. In the third place, it can no longer be pretended that this control is a part of a contemplated and prepared application of "insulation."' That idea now becomes ludicrous in face of the confusion and inconvenience evident on all sides. These being the fact?, and we do not see how they can be disputed, hoAv much longer can the Government persist in its denial (by practice) of the existence of the emergency? Continuation of lavish internal expenditure on a scale even greater than formerly is plainly not in keeping Avith the conditions which are revealed by this rigid trade control. The longer the Government insists upon pursuing internal extravagance while forced to exercise rigid external economy the worse the position must become both externally and internally.