OVER-PRODUCTION

Evening Star, Issue 21285, 14 December 1932, Page 6

OVER-PRODUCTION

POSITION OF PRODUCERS AND MANUFACTURERS NEED FOR READJUSTMENT His Excellency the Governor-Gen-eral, in the course of his address to the Rotary Club yesterday, said that Rotary was a world-wide organisation. It was, if he visualised it aright, an international movement which was intended to promote amongst far-sighted and enlightened people a greater knowledge of the interests and outlook of other people and of other nations. One of its aims was undoubtedly to foster sound and sane internationalism in the interests of true world progress. They were in these modem days, industrially and otherwise, one large family whose interests were dependent one upon the other. It was regrettable that during the past few weeks a controversy should have arisen between the two great English-speaking nations of the world—namely, Great Britain on the one hand and the United States on the other —and he was sure they would share with him the devout desire that at no distant date the representatives of the two countries would get round the table and exchange views in friendly conference, readjust their international differences, arid thus accelerate the wheels of industry throughout the whole world. His Excellency said there was overproduction to-day,' not only among the manufacturers, but particularly among the primary producers, but this would not be the case if only conditions ■ were normal. The heavy burden of international war debts represented means of destruction, not of commodity production. If the • monetary medium of commodity exchange were plentiful and the law of supply and demand were allowed freely_ to operate there _ would be no appreciable over-production of food or the raw material for clothing. Whereas in some parts of the world wheat and coffee and cotton were being destroyed as unprofitable to the producer, and their meat and wool were drugs upon the market, one-third of the people of the world were halfstarved or underclothed and the other two-thirds were consuming substantially less than before the war. Eighteen months ago. when the world price of wheat was lower than it had Been for forty years, the price of wheat to more than 100,000,000 people in France, Germany, and Italy had been double the world price, and regulations had been in force for stretching its use in the making of bread. If there were a plentiful supply of gold or whatever might be the token or medium of world commodity and if in the absence of national tariffs, bounties, and cartels cheapness were allowed free play, local surpluses would flow_ naturally to where there was a scarcity and would be bought freely with a plentiful currency. The extraordinary factor —particularly marked on the Continent of Europe—was that with_ the fall m the open world market prices the demand had not increased, as it inevitably would have done under normal conditions and -universal freedom of trade. But for man-made impediments imposed in supposed national interests the cheapness of food would have increased, its consumption and facilitated the absorption of the worlds output. Similarly there was said to be no actual deficiency of the recognised medium of exchange—gold—but the aggregation or over 60 per cent, of what was employed in international exchange in the coffers of two nations in the world not only reduced the commodity values, in terms of gold, but clogged the wheels or international exchange, and incidentally the equitable settlement of old standing international obligations. In the meantime the old-fashioned, clumsy system of barter of one commodity for another was being attempted in several countries, and bimetallism was being advocated in many quarters. His Excellency remarked that he was afraid he remained an unrepentant himetallist, and that he had boen on© for forty years. International readjustment was pressing and inevitable unless economic adversity and a sermus lowering of the general scale of living were to become normal instead of tem-porary-world factors, and this needed to be recognised and acted upon at the forthcoming world economic _ congress. Such readjustment should dispel from the mind of the efficient and alert primary producers the bogey of overproduction find the fear of their occupations becoming permanently unprofitable. ... His Excellency said that the mam outcome of the so-called economic congress held at Genoa in 1927 was a recognition of “ the essential interdependence of agriculture, industry, and commerce.” He believed that there was no document of world-wide importance which had been put forward in reoent years which, to his mind, had carried more conviction, emphasising the views of all the nations assembled at that congress, than the essential interdependence of agriculture, industry, and commerce. Just as the gross demand for land products in Britain and other great industrial countries was dependent upon good trade among the industrial population—i.e., upon the free exchange of manufactured commodities—So conversely the gross demand for factory output was conditioned largely by the economic prosperity and purchasing power of the world’s rural population, which far exceeded that of its industrial inhabitants. So also, just as co-opera-tion and market organisation had become vital conditions of agricultural and pastoral production, rationalisation, and with it the material reduction of overhead costs, bad become vital factors in the sound and profitable conduct of manufacturing enterprise and in the process of lowering restrictive fiscal barriers. Productive competition, said His Excellency, made for progress and enlightenment, and put a discount upon mediocrity and reaction and stagnation in methods of production. This, said His Excellency, necessitated careful attention to the teachings of science and research as soon as their commercial value was clearly demonstrated. It involved organised effort for supplying overseas customers with products cif consistent high quality and uniform description and meticulous care in studying the exact requirements. If, for instance, they preferred whole-milk cheese of uniform consistency to skim-milk cheese,_ with holes or cracks in it, and lean pig meat to fat, it paid them to study the oversea customers’ requirements and to remedy what these customers regarded as defects. His Excellency concluded by saying that he did not suppose there was any Englishman interested in primary production who had travelled more over the world than himself, and he had never found a country where there was such a variety—an economic variety—of climate and of soil and of good conditions generally as were to be found in this country. They should render scope for its jirimary producers to meet all the requirements of the British market from tune to time, and to supply commodities which would leave some profit

to the producer, if not in one direction, then in another. On the motion of Mr F. H. King, a vote of thanks to His Excellency for his address was carried by acclamation.