The Evening Star MONDAY, SEPTEMBER 12, 1921.

Evening Star, Issue 17764, 12 September 1921, Page 4

The Evening Star MONDAY, SEPTEMBER 12, 1921.

The British trade returns for August tirovft TPPPJTTAfI

British Trada Decline.

winch were received last week do not make very inspiriting reading. r™ T . _ _ C L .1 „

The volume o! trade for the month decreased by about £130,000,000, the shrinkage in imports and in exports being roughly equal. The details cabled show that Britain is purchasing abroad less raw material and foodstuffs, and she is sending out oi the country less cotton and woollen goods (especially the former) and less hardware. The best idea of this decline in trade is given by what are known as graphs. A recent number of ‘The Times’ Trade Supplement contained one of these instructive diagrams, showing the trend of the volume of trade from June-, 1920, to June, 1921* The curves showing the values of both imports and exports trend ever downwards, with a very pronounced drop indeed in the first two months of 1921. The exports curve keeps well below the imports curve, and the difference is not made up by the amount of re-exports. This means that there is an adverse balance of trade. In the pre-war days, when Britain was a creditor nation, with a large -and steady income drawn from world-wide foreign investments, that adverse balance was of ho significance. It could not be otherwise, since Britain took the bulk of her foreign interest payments in goods, and this kept the value o£ the imports high. But now the position is very different. Many of Britain’s holdings of foreign securities were liquidated to provide the Government with funds to carry on the war, and for the same purpose there was heavy borrowing from abroad-, chiefly fhom America, by the ’ Government, The net result is that Brito be in a sound financial position,

should export moro. than she imports in order to bo able to pay interest on foreign indebtedness. That was why • some months ago there was such a call by the nation’s economists for increased production. The Response seems in the mam to have been increased industrial strife, causing decreased production, accompanied by a higher cost of production, which closed some overseas markets to British goods because foreign competitors could undoxboll the British manufacturers. This caused widespread unemployment, and has brought about a position which the Press regards as more critical than any which has vet arisen.

Just two months ago a Manchester newspaper published an article on this economic and industrial drift written by a distinguished politician, who, for valid One of the most striking things in this article is the narration of a meeting between its author and the Canadian delegates who were then in London attending the Imperial Conference. One of these Canadians said Over the luncheon table to his host;

We are no Puritans, but this Byzantine levitv that we see, all around us

here,'in the theatres, in the streets, in the mad frenzy over prize-fights and cricket matches, tennis championships and golf championships, racing, and all the things that don’t matter, while your house is burning over your ears, and your trade is paralysed, and 20 percent. of your people are workless and being kept quiet by and your finance has collapsed—all this leaves us dumb and amazed. Are wo mad, or

are you ? Without stating the answer given to the Canadian’s pertinent query, the writer admits the seriousness of the charge, and ho thus sets forth the position for his readers to ponder over: t We Hvs by the export of manufactures and the import of food and raw materials. With the one we pay for the other. Unlike France, which feeds itself and is self-contained, we perish when we cease to export. We are ceasing to export. Our overseas trade has broken down. The war delivered it a deadly blow. Tire coal strike has knocked it out —temporarily or permanently who shall say? Take one or two facts out of hundreds that could be given. Our export coal to South America, one of the most profitable of our trade operations, has gone. The South American railways, which we used to supply with power, have turned to America for coal and to oil for a substitute fuel. We can no longer pay in commodities for the food wo used to receive from the South American States. _ Our shipping has ceased to have anything to take out, and is ceasing to have anything to bring back. ■ The official report of the coal mining production in the United States gives an output per man of over 800 tons per annum. The annual output per man in this country is under 200 tons. I make no comment as to causes hero. lam merely stating facta. The chairman of one of our banks stated a few days ago that basic pig-iron was being sold in Belgium at one-half the cost of production here And so on. See the results. Our trade returns are melting like snows in May. Our unemployed are increasing like flies in June. Business promises in London have slumped to. one-fifth their rent a year ago. Great firms are trembling on the brink of ruin, crushed between taxation on the one side and the disappearance of trade on the other. Shares which were worth pounds two years ago have gone to shillings, to pence, to nothing. What of the national finance? The Budget, less than three months old, is wrecked. Tile money is not coming in as Air Chamberlain reckoned; the ex-

pendit.ire is out of hand. We shall not he millions to the bad on the year. We rhall be hundreds of millions to the bad.

The above picture may be overdrawn, but it is supported by those tell-tale downward curves of the volume of trade. We in New Zealand know well enough the truth of the partial breakdown of Britain’s trade with ns Vessels have been coming out in ballast instead of bringing full cargoes of British goods, as once they did. That is partly because we have had, and still have, our own financial troubles, and are unable to pay for imports. And because of the industrial chaos in Britain she is unable to pay us high prices for the foodstuffs, etc., we export to her. Our economic future is closely wrapped up in that of Britain, and at this distance—though it is largely for us to work out our own salvation—so far as Britain’s is concerned we can do little more than hope and trust that wise statesmanship will guide the destinies of the Old Country out of the dangerous quicksands into which they have strayed.