BRITISH TRADE RECOVERY.

Evening Star, Issue 21543, 16 October 1933, Page 8

BRITISH TRADE RECOVERY.

Almost the only comforting item in current overseas cables is the confirmation and amplification of Britain’s trade recovery. Broadly speaking, detenora tion was checked late in 1931. At first the position was just held, and there has been no real check to the slow upward climb begun nine, or twelve months ago. There have been so many false alarms over this emergence from depression since the post-war boom ended that British writers and speakers on politics and economics have latterly been chary of putting general interpretations on individual cases of a favourable nature. Towards the end of last week, however, Mr Stanley Baldwin, who has always impressed one as never doing or saying anything except undei a full sense of responsibility, adopted the broadcasting method of reaching the maximum number of ears to hearten up the nation m its long struggle with unemployment and heavy taxation; and bis speech is no more than the coping stone on many utterances in the same vein, whether spoken or printed, that have been made m the past month or two Mr Baldwin referred to the rapid advances made m the export trade and a steady reduction in the adverse trade balance, and an increase during the last year by 700,000 in the number of persons brought into employment. He stated that British trade was slowly and steadily improving and confidence was returning. Taking the last of his three main points first, the fortnightly London commercial cabled summary today c mi morales the percent-

ago reduction of unemployment in various major industries since 1933 began, ranging from 52 per cent, in the woollen industry to 20 per cent, in general engineering. Figures such ns these verify Mr Baldwin's claim as to slow and -steady improvement in trade, and Ins view that confidence is returning is vindicated by the trend of the Stock Exchange market in British industrial shares. Beginning from September three years ago, and using basic figures to indicate the average share values, the figures (as at September) are successively: 1930, 100; 1931, G 3; 1932, 79.4; 1933,. 100.6. Of all sections on tho London Stock Exchange the market in industrials is at present showing the greatest strength, and it is not at the expense of other sections, tho tone throughout other sections being reported “ brisk and cheerful.” When early this year the American crash came many people declared that the United States, having plunged tho world into the very deepest depth of the long depression, must be the country to give the lead in general emergence. That, however, does not appear to be a good prophecy. Working on orthodox lines, Britain forges ahead, while the United States, if moving at all, may be going back ward or forward—no one can tell until a more advanced stage of her revolutionary industrial experiment is reached. In this connection the dictum of Mr Dennis Robertson at the (liberal Summer School in England may be quoted. “The trade cycle, for mysterious reasons of its own, started on tho upgrade in the middle of last year, and I do not believe that the featherheadedness of the United States Government. nor the swell-headed ness ot the German Government, nor the ilatheadedness of the British Government can stop it.”

Mr Baldwin speaks of the improvement in Britain’s exports and the reduction of her adverse visible trade balance. There is, of course, an intimate relationship between the two. Wo have only the authentic figures needed to make a thoroughly reliable comparison up to the end of July. These (contained in Lloyd’s Bank Review, September number) show that Britain’s total imports in the January-July period, 1932, were £412,700,000, and in the corresponding period this year were £378,800,000. Her total exports in the same seven-mouth period of 1932 were £248,900,000 and in the corresponding period this year were £234,600,000. Tims she reduced her imports by £38,900,000, but her exports shrank by £14,300,000. The reduction of imports far faster than of exports has made the adverse visible trade balance £24,600,000 less in the 1933 seven-month period than in the 1932 period, it being £139,200,000 as against £163,800,000. It was the growth of this adverse visible trade balance which was causing Britain such great concern as to impel her to encourage and protect her own agriculture, so that, if she could not increase her total exports, she could economise on imports. Her success in this direction is shown by this quotation from ‘ Lloyd’s Bank Monthly ’: “ Our adverse visible trade balance shows an improvement of £24,600,000 over the first seven months of 1932, and one of £74,600,000 over the first seven months of 1931.”

Unless (as is suggested by Mr Baldwin’s speech) exports showed a great increase during August and September, the great diminution in unemployment in Britain is due chiefly to a real revival in her internal trade. This doubtless has been stimulated by her partial abandonment of Frcetrade in favour of moderate protection and by her cutting loose from the gold standard. “So far as our internal affairs are concerned,” states the authority before quoted, ‘‘ there is a good prospect of a slow but steady revival in trade and employment, such as we have enjoyed during the past few months. Unfortunately, a revival in internal trade alone is not enough, for whole sections of our industry are dependent on foreign markets. Wo must also have regard to our overseas trade position. The recovery in our export trade is very limited and sporadic, and in some important sections, such as cotton and the heavy industries, wo have suffered a further set-back. While the recent recovery in world prices of primary materials has brought about some improvement m the purchasing power of our overseas markets, a further big recovery in trade and prices is needed before the majority of the world’s nations will dare to remove the restrictions upon imports and currency transfers which they have been forced to impose in self-defence. In this respect there still exists a deadlock, for it is difficult to envisage a general revival in trade so long as these restrictions remain in force.” From the above two outstanding deductions may be made—first, Britain’s increasing success in her determination to become more self-con-tained; and, second, Britain’s struggle to export in the face of Customs tariffs and depreciated currencies. The first is of particular moment to our New Zealand primary producers; the second to our currency manipulators.