WORLD TRADE

Evening Star, Issue 22346, 23 May 1936, Page 8

WORLD TRADE

NO RETRACING THE PATH SIGHS OF A RECOVERY IN PRICES If the opinions of Sir Jdsiah Stamp are well founded, peoples who frame their national policy with the intention of restoring international trade in the intensity which prevailed before 1914 are labouring in vain. Sir Josiah, in a lecture in Vienna entitled the ‘ Outlook for International Economic Relations,’ gave his suggestions for a solution of the problems of world trade. Those suggestions were;— The freeing of trade relations. Restoration of a stable internal price level in order to secure foreign confidence. The keeping of national sentiment within reasonable limits. Aiming at an international money standarcl by way of co-operation, not in a spirit of financial struggle. Comparing the volume of the world’s trade of 1913 with that of 1929, Sir Josiah Stamp said, might be useful for a study of present economic conditions while referring to pre-war trade conditions, but it would be misleading, as the latter would never return. The pre-war international gold standard under London’s leadership would also never return. ! NOTICEABLE RISE IN PRICES. Tho preliminary conditions for economic recovery are remunerative prices for producers, and Sir Josiah expressed the view that at present an adjustment and recovery in prices were noticeable. World foreign trade was unlikely to regain its former proportions, but an increase to its former level of volume was probable. Even the free trade dogma might theoretically revive, he said, in the event of a sudden wave of inventions in certain countries, such as happened in Great Britain some 150 years ago, when ‘ inventions created inequality detrimental to non-British countries, and involved increased foreign trade to restore equality. But for all practical purposes one must reckon with the tenacious life of the spirit of nationalism, which meant that the level of customs tariffs would only slowly decrease, while the spirit of economic control would invade the whole economic life. Consequently the pre-war highly responsive system of commercial exchange between nations would remain handicapped, and they could not expect that international trade would rise to its former proportion to combine home and foreign trade. Discussing the monetary aspect. Sir Josiah stated that lack of confidence in currencies constituted ihc greatest hindrance to recovery. In addition, there was Ibo dilemma of choosing be-

tween a stable internal price and wage level on the one hand, and the stability of international means of payment on the other. REGIONAL MONETARY PARITIES. Sir Josiah endorsed the opinion of a number of other economists, expressing the view that, for the time being, no universal uniform method could be applied to the solution of the above dilemma. His suggestion was that regional monetary parities between the sterling bloc, the dollar standard, and the gold bloc should be fixed for certain periods. This would be the essential preliminary stage on the road to a still distant goal. 'Whatever might happen, Sir Josiah concluded, Great Britain would be among the first nations struggling for monetary stability and increased international trade. Britain’s customs policy was not the outcome of national sentiment, but the result of certain obligations towards the British Empire, and the exchange equalisation account did not aim at securing commercial advantages for exporters, but at eliminating the troublesome exchange fluctuations which were detrimental to international trade.