THE H.B. TRIBUNE WEDNESDAY. AUGUST 17, 1927 TRADE BARRIERS

Hawke's Bay Tribune, Volume XVII, Issue 208, 17 August 1927, Page 4

THE H.B. TRIBUNE WEDNESDAY. AUGUST 17, 1927 TRADE BARRIERS

VLTiTH Great Britain so many years pursuing a Free Trade policy, even in.the face of the most serious difficulties, it is not surprising to find two of her best known economists in the forefront of the movement for breaking down international tariff barriers. One of these two, Sii George Paish, was more than ordinarily emphatic on the absolute necessity for this when recentlyaddressing the summer school of the League of Nations at Oxford. tn fact, lie said that the high protection policy which is being followed by So many nations could not but end in general disaster unless it was verysoon materially relaxed.

His argument as to the financial position of the world is that the world has overborrowed largely because of these hindrances to trade, and that when the lenders refuse to issue any more credit then the crash will come. Vast sums were borrowed abroad during the war by the various belligerent nations in order to purchase food and material necessary for their maintenance. Since the war these nations have borrowed still greater sums in order to purchase what they required for reconstruction and for the maintenance of their peoples, and credit, he declares, must continue to be created for this purpose so long as the business of the world is out of adjustment and aationg are unable to pay by sales of their own produce and services for what they need to buy, plus the interest on what they owe.

He then goes on to point out that the amount of credit is now so vast that any further appreciable increase, may be a matter of difficulty. Nevertheless, should additional credit cease to be available, great distress must ensue lx>th in the nations that need tn buy and in the nations that need tn sell. As long as additional credit can be obtained so long onlycan present conditions continue, and a general breakdown of business ne averted. Under the most favourable conditions, and with the most active

co-operation of nation with nation, the situation would be highly dangerous and most difficult to adjust. But under existing conditions of international antagonism, when nations are creating every possible obstacle to the sale by other nations of the goods they need to sell in order to pay their debts and pay for the products they need to buy, the situation is an impossible one. This, of course, applies equally ,o compulsory reparation obligations as to war debts voluntarily incurred. As Sir George Paish sees them, the financial difficulties of the world are four-fold. First, how can consuming nations continue to buy if they are unable to sell their products tn exchange? Second, how can producing nations continue to sell what they need to sell if the consuming nations are unable to sell the goods they need to sell in order to make payments? Third, how can credit obligations be met unless the creditor nations are prepared to accept payment in goods and services? Fourth, how can reparations be paid unless the nations responsible for their payment are permitted to sell to other countries enough of their products and services, not only to make the reparation payments, but to purchase the necessaries of life for the sustenance of their peoples?

Strongly supporting these views we have Sir Alan Anderson, president of the International Chamber of Commerce. Addressing its conference at Stockholm, he said it was futile for each nation to criticise the actions of the others, or even for all to agree that ‘‘something must be done.” To secure effective results it was, he insisted, necessary for the delegates subscribing to these views, and for the financial and commercial interests represented hy them, to bring pressure to bear on their own respective Governments. No doubt, the ‘‘fearful example” both Sir George Paish and Sir Alan Anderson had chiefly in mind was the United States, the great creditor nation oi the post-war era and the one with the highest tariff wall, The former, at any rate, had no hesitation in pressing his ponits when subsequently addressing a gathering of the American Chamber of Commerce in London. There he made it fairly plain that, as financially the strong nation of the World, it was for the United States to give the world a lead in a reform that would probably do more for the preservation of its peace, and for the promotion of international good will, than all the disarmament conferences that could be called.