ANOTHER SLUMP

Hauraki Plains Gazette, Volume 47, Issue 2666, 6 September 1937, Page 3

ANOTHER SLUMP

BUT NOT LIKE 1931 SLACKENING ANTICIPATED BRITISH PREMIER’S VIEW. What will be the effect upon trade as the period of British rearmament reaches completion? Will there be another slump? These questions were referred to by the Prime Minister, Mr Neville Chamberlain, when he addressed supporters of the National Government at the Albert Hall. “Of course, we know,” he said, “that trade must have its ups and downs; and no doubt as our rearmament begins to slacken off we shall want something to take its place. But I can think of quite a number of reasons why it is extremely unlikely that we shall ever find ourselves again in such a depression as we suffered from in 1931. . “At that time we had not recovered from the tremendous destruction of capital which took place during the Great War, and our unprotected market was then a dumping ground for the surplus of the countries who found themselves unable to sell their goods in their own markets. It must not be thought for a moment that the Government is not considering even now what measures it should take by way of public works or otherwise to provide employment when the output of our factories begins to be relaxed. The Best Provision. “But nothing in the way of public works that this or any other Government could do could provide more than a mere fraction of the effect which would be produced by a comparatively small variation in the general trade of the country, and therefore the best way in which we can provide against a slump is to encourage and assist our traders to develop new markets, and by research and by the re-equipment of their factories to reduce -their costs.” • It is a well-known fact that the British Government is considering plans to safeguard the trade position .when the rearmament programme 1 has been completed. One of the principal objects in view is to ascertain how far overseas trade can be developed through trade agreements with Empire and foreign countries. Meanwhile trade returns continue to be satisfactory, and there is every confidence that the present boom conditions will continue over a considerable period. None the less, the Government. is thinking ahead, and experts are now making a close analysis of trade prospects over the next few years to see how far the Home and export trade can be increased.

The Government has attached verylittle importance to a system of public works as a factor in assisting trade and employment. It is, in fact, looking towards more permanent measures through new outlets for British products. Efforts to increase overseas trade are assisted by the rise in the last two years in the price of primary commodities. This in. turn is improving the purchasing power of some of the countries which, in former years, were Britain’s best customers, and for this reason the prospects of trade expansion are more hopeful. Discussions Making- Progress. The discussions which are proceeding with a view to formulating an economic policy among the principal nations are, it is understood, making good progress, but it is not expected that a formal conference of representatives of the nations concerned can be convened for some time. The in»K. vestigation which M. Van Zeeland, the Belgian Prime Minister, is undertaking cover a very wide field, and if and new economic programme is to achieve success it is necessary that a large measure of agreement should first be obtained on general principles.As a result of his interviews with Mr Neville Chamberlain, the Prime Minister, and Mr Anthony Eden, the Foreign Secretary, M. Van Zeeland is to continue his inquiries among leading statesmen in other countries. He has received considerable encouragement to go ahead both in his talks with the British Government and in his prior conversations with President Roosevelt and Mr Cordell Hull, United States Secretary of State. The prospects for holding a conference are, it is said, distinctly hopeful. It is generally emphasised that the moment political relations—especially Europe—can be said to have taken a real turn for the better, the way is practically open for an effort to face i the problem of getting rid of the more forms of trade restrictions which have grown up during the slump. World trade recovery has not yet proceeded far, but in the past year the movement has been positive. it is

pointed out by the Financial Times, in a review of the position. The economic position is in itself sufficiently hopeful to encourage the view put forward by some, that trade forces may yet lead the way to political appeasement rather than wait upon the outcome of the battle between rival ideologies. As Sir Josiah Stamp put the matter the other day, the psychological background is that the countries are positively tumbling over themselves to remove restrictions.

The dissipation of the wheat surplus and the advance in the prices for grain and other primary commodities have meant ability to pay debts, restoration of credit, and a higher purchasing power. These factors make for a quickening of the international exchange of goods. By entering into the tripartite monetary agreement of September last, it is generally agreed that France, the United States and Great Britain have given evidence of their desire to end the sterile period of aggressive nationalism.

Part of the United States. At the same time it is believed that the outcome of the project for a trade understandiing with the United States must play an important part in paving the way for a more widespread agreement. The Dominion representatives at the Imperial Conference, including Mr W. Nash, have gone home to place the facts before their constituents. “Until they have had time to weigh up the position from the broad and permanent as well as the immediate and sectional point of view, it is idle to expect useful action,” says the Financial Times. “Without accepting that there is any necessary antagonism between the principle of Empire preference and an Anglo-American agreement towards freer trading, the task of Dominion Ministers on this question is admittedly not an easy one.

“There is no need to go into detail concerning the ways in which new trade pacts would be advantageous. There is not a market in the world which Britain should neglect. There are, nevertheless, some countries which both politically and economically lie nearer to her interests than others. Politically there is no escaping the claim, both sentimental and strategic, of the Dominions, but there is a danger here of making her Imperial agreements too exclusive. The Empire could undoubtedly form a self-sufficient bloc in time of need, but self-sufficiency is the negation of trade and is a concept imposed entirely by political, not by economic, ends. Consequently if world trade is to be genuinely more free, the Imperial ties must not be accentuated more than is absolutely necessary. Broadly speaking, the markets which will' prove most valuable to British interests are those of the prim-ary-producing countries. These have passed through a depression of terrible severity, and with the rise in the prices of them produce they are now beginning to find themselves able to purchase the many things of which they have been, deprived for so long. Their era of prosperity is only just beginning, and the cultivation of their markets should give a substantial and lasting return to the British manufacturer."'