INTERNATIONAL TRADE.

Evening Star, Issue 21037, 26 February 1932, Page 11

INTERNATIONAL TRADE.

I TO THE EDITOR. Sir,—ln your loading article of the 19th inst. you quote Mr Hattersley as representing that the financial indebtedness, of other countries to Great Britain had been increasing at the rate of £95,000,000 a year, and, further, “ that very largely the manufacturing and trading nation has to take its payment from those other nations constituting its outside markets by investing the amount as capital in those outside countries, and financing their development.” There can only be one interpretation read into this, and that is that Britain has for “ very many decades,” according to Mr Hattersley, been selling goods abroad, and instead of receiving goods as payment in return has had to transpose the amount in default into a loan. British loans abroad tot up to something like £4,000,000,000, and we are asked to believe that “very largely” (I quote Mr Hattersley’s own words) this amount has been made up by successive defaults on the part of her customers, causing Great Britain to step deeper into the mire by allowing such deficiencies to take the form of loans. The Old Country does not do business that way. The export and import figures furnish no warrantry for such a claim, and in brief it may be said that Mr Hattersley’s sketch of the position is a gross travesty of what really takes place. When Britain exports goods in the ordinary way of international trade she must receive goods from tho debtor country in return, otherwise tho trade ceases. Furnishing loans is an entirely different process. These, of course, tako the form of goods, but are provided out of yearly accretions of capital, and were these accumulations to cease the ordinary import and export trade would still bo carried on. Lending money, or in reality goods, to nations who fail to pay is no part of Great Britain’s programme. When the debtor squares up, the question of a loan may come up for discussion; certainly not before. *Mr Hattersley goes on: “ There is certainly a limit beyond which this process cannot continue.” As a financial process according to his ideas it has never commenced; ho is simply flogging a dead horse. Great Britain’s international transactions are divisible into two main accounts: (I) Current (that is, income and expenditure) and (2) capital (affecting creditor relationships with tho rest of the world). Up to a quite recent date the current account has produced an eminently satisfactory surplus of income as against expenditure, a position that could not possibly have evolved had she been called upon over Mr •Hattersley’s “ several decades ” to tolerate a practice where debtors not only refuse

to pay, but succeed in inducing Britain to treat the deficits as loans. In any case, if Britain has at times erred she has nothing to hope for from Mr Hattersley and his friends; their own particular scheme for setting things right fails to. secure adoption owing to the fact that it would prove a devilish device for robbing the worker, and as Mr Mr D. H. Cole bitingly remarked that “if the suggested scheme contained the elements of prosperity the capitalists would have snared it long ago.”— I am, etc., S. February 26.