The Evening Star WEDNESDAY, NOVEMBER 14, 1928. OVERSEAS TRADE.

Evening Star, Issue 20023, 14 November 1928, Page 6

The Evening Star WEDNESDAY, NOVEMBER 14, 1928. OVERSEAS TRADE.

This month's industrial bulletin, issued by the Canterbury Chamber of Commerce in conjunction with tho Economics Department of Canterbury College, deals with changes in the nature and direction of world trade since 1914. Dependent as New Zealand is on world trade, and particularly on British markets, it is important that we should realise the nature and extent of these changes wrought in the post-war period. Broadly speaking, it is shown that, as might be expected, the rest of the world has made considerable material progress, to some extent at the expense of Europe, one effect being that the Continent to-day has a labour surplus of some ten millions. This is not so much due to shortage of capital as to loss of markets and to changes following in technical progress. Such factors, for instance, as the growth of motor transportation, lessening the demand for railway equipment; the replacement of cotton and woollen goods by those made from artificial silk; the reduced demand for coal with the wide adoption of fuel oils—such rapidly developing changes as these furnish serious problems for the modern business world. And the economic balance and stability that seemed to exist before the Great "War have vanished. Then, again, the war accelerated the growth of industrialisation in otherparts of the world than Europe. From this change Great Britain is one of the chief Sufferers'; for it has meant that her manufactures have had to meet increased competition in overseas markets from countries driven into lines of manufacture when they could no longer buy European goods. Again, such industries as different varieties of iron manufactures were really over-de-veloped in Europe during the war years, and now tend to find themselves over-capitalised and burdened with a productive capacity far beyond what their available markets will absorb at remunerative prices. A series of tables, taken from tho data submitted to last year’s World Economic Conference at Geneva, bears out these conclusions. Comparisons made of the pre-war and post-war production in Europe on the one hand, and the rest of the world summarised on tho other, show, for instance, that European production in coal, iron, shipbuilding, mechanical engineering, cotton, and cereals is in

every ease lower than before tho war. Though production lias expanded greatly in artificial silk, nitrogen products, the electrical trades, and also in tho motor trades, yet world production has increased appreciably more than lias European. Tables showing Hu volume of trade for vane ■ ities similarly indicate that the great increases -: n trade Ijavo occurred, not in Europe, but in -‘.orth and Central America, Asia, and Oceania (including New Zealand). The foreign trade of Europe lias declined to 91 per cent, of the pre-war figure in the caso o£ imports am] 81 per cent, in the case of exports, notwithstanding the fact of an increase of 4 per cent, in population.

■ Of course, this varies from country to country and from industry to industry. Study of detailed returns shows that some countries—e.g., Italy and the Scandinavian lands—appear to have gained, hut tho larger and more highly industrialised aro lagging behind. Food exports, again, arc maintained, but not those of manufactured articles, which reacts again to cause a decline in the import of raw materials. One result has been that in the case of Great Britain the income from investments abroad and for shipping services rendered has been used in financing the import surplus more than to provide funds lor new investment abroad. Indeed, the necessity of paying large sums in interest on war loans, which ultimately crosses the sea ns goods, has, caused big changes generally in the “invisible” items that make up various countries’ trade balances. Some countries that before the war were creditors, receiving an excess of imports representing inteiest payments, are now debtors needing to pay out an excess of exports, while tho United States has turned from a debtor country to a. creditor to much ot Europe. Difficulties, changes, and uncertainties such as these are of importance for New Zealand, mainly because they determine conditions in markets where more than four-fifths of our export produce is sold, as well as the terms on which most of our imports are produced and offered lor sale to us. Bntish prosperity is largely hound up with that of Europe generally, and outown rests on Great Britain’s, so that signs of stabilisation and recovery overseas will also be very welcome here. --