The Evening Star THURSDAY, MAY 17, 1934. A TRADE DILEMMA.

Evening Star, Issue 21722, 17 May 1934, Page 8

The Evening Star THURSDAY, MAY 17, 1934. A TRADE DILEMMA.

Recently in these columns it was stated that evidence is already accumulating in Britain of a cleavage between town and country, between manufacturing and farming interests. Some weighty corroboration is now to hand by mail. At the annual general meeting of the Federation of British Industries, held on April 11, Sir George Macdonogh gave an address which holds considerable interest for both primary and secondary producers in New Zealand, as perhaps the following passages may illustrate : —There appeared, he said, to be a growing conflict between certain tendencies in Great Britain’s economic policy. The Government had, on the one hand, been promoting a policy of national self-sufficiency in agriculture, while, on the other hand, through its foreign commercial policy, it had been striving to encourage- industrial revival by a system of commercial agreements designed to promote the interchange of British manufactures with overseas agricultural produce. Sir George nominated a near date by when at least a minor crisis or clash seemed to be likely, if not inevitable. There was, he added, a growing hostility in agricultural circles to the Ottawa agreements, and, unless a decision was made soon, an unhappy situation was bound to arise when these agreements expired. Important sections of these agreements were due to terminate in the near future—the agreement in regard to meat, for instance, expired on June 30 next. Before that date the Government would have to make up its mind whether it intended to pursue to the bitter end its policy of rehabilitating British farming, or whether an expansion of interimperial trade was to take precedence, or whether there was to be a delimitation of the two objectives. When a gentleman holding so prominent and responsible a position in industry as does Sir George Macdonogh speaks of pursuit “to the bitter end ” of the Government policy of rehabilitating British farming, it surely indicates that Mr Walter Elliot by no means can be said to have the country solidly behind him in his “ reforms.” Evidently he is as unpopular with some sections of the British public as he undoubtedly is with a considerable number of overseas dominions producers and those connected with them in the export trade. We are quite unaware whether Mr Elliot’s position in Cabinet is secure or whether it is precarious. From what we can learn, - however, he is a man of great force of character and unflagging industry, and by not a few 1 is regarded as a future Prime Minister. Sir George Macdonogh virtually called on the Government to declare itself either for or against Mr Elliot—to sponsor him once and for all or to disavow him, which latter would mean either his leaving Cabinet or being given some other portfolio and transferred from the Ministry of Agriculture. It was essential, said Sir George, both for agriculturists and for industrialists, to be given a definite decision on its policy by the Government, in order that they might no longer remain in a state of doubt as to the future basis on which they should plan, for already representatives of agriculture had begun to stake their claims. “We as manufacturers have to ask ourselves,” he continued, “ is it reasonable to expect the dominions to keep a check on the expansion of their secondary industries if we restrict still further our purchases of their agricultural products? I say nothing about our neighbours on the Continent, with whom wo have also concluded commercial agreements based on a willingness to admit their own agricultural products to our home market.”

The British Federation of Industries has the greater cause for anxiety, because, despite the truly marvellous recovery of British trade during 1933 (duo to the exhaustion during that year of accumulated stocks of foreign products and the consequent pronounced actual operation of the imposition of protective tariffs by Britain), there lurks in the background the spectre of Japanese competition. By means of the Customs tariff Japan-ese-manufactured goods can be kept out of the British market, but there is the question of outside markets in which both countries compete for trade. Britain’s trade recovery in 1933, as wo have said, was due to expansion in her domestic market rather than to increased exports to other countries. And Britain’s balance of trade is such that it is imperative for her to find further overseas outlets for her manufactured goods. To some small extent she found these in 1933, but, as a Far East merchant points out in a recent issue of ‘ The Times ’ Trade Supplement. “ competition, which even if checked in this country (Britain) by prohibition—ns

suggested in a recent private member’s Bill—will spread to markets from which .a part of our recovery Las come,” is still to be feared from Japan. There is. therefore, every reason why investigation into not only Japanese competition, but also potential Japanese competition, should be undertaken forthwith.” There can be no prospect of a “ two-way ” exchange of goods. The Japanese worker has no liking for imported European goods, except raw material for manufacture and the machinery necessary for its conversion to the finished article. Even if the Japanese worker developed a liking for imported goods he would not bo able to indulge it. The average wage of the Japanese male worker is 14s 7d per week, and of the female worker 4s 9d per week. These earnings—abnormally low as they are—represent the peak wages in. the larger factories; the wages in the majority of cases are considerably lower. Due regard should also be given to the fact that female and child labour play a much greater role in Japan than elsewhere, and that there is not only female labour in the lighter branches of industry, but also in the heavy industries, such as raiuing, and rationalisation has incx-eased the percentage of female labour in the heavy industries. A comparison of the monthly budget of a Japanese family of five is proof that unless there is a great upheaval Japanese competition is not a passing phase, but a serious permanent factor which no industry can afford to overlook. The total expenditure is £3 3s per month.