BRITAIN NO LONGER PAYING HER WAY.

Manawatu Times, Volume XLIX, Issue 2713, 22 June 1925, Page 10

BRITAIN NO LONGER PAYING HER WAY.

(By Sir Leo Chiozza Money.)

Imports wo must have. If we fail to got them, a largo part of our population must seek homes in the places from which tho imports were once derived, while the remainder must sink to a lower standard of life.

Britain, with few imports, would return to tho conditions of that old poverty from which wc began to emerge towards the end of the 18th century.

The wilful ignoring of that plain fact by some loaders of public opinion is a terrible danger to the nation. Week by week, hundreds of speeches arc delivered in which it is asserted that one thing,' and one thing alone, is needed to give universal prosperity, and that is a better distribution of existing and enormous wealth. We have 648 people to the square mile in England and Wales against 184 to the square mile in France. We support more people to the square mile than they do in France, despite a worse climate than they have in France, because of out groat foreign trade—our great earning of imports by exports. In the year 1913 we not only earned our Imports of 76 9 millions, but actually had an excess of exports of goods and services amounting to nearly 200 millions more than was needed to pay for those Imports. Imports were £7 3 9,000,000. Exports were £635,000,000. Excess of imports of goods was £134,000,000. Add imports of gold on balance, £12,000,000. Excess of visible imports, £146.000,000. Invisible exports: Shipping, interest earned on oversea investments, etc., -were £335,000,000. Excess of exports of goods and services, £189,000,000. Thus, in 1913 we added nearly 200 millions to our oversea investments, which meant that in tho future wc should have still more imports to receive.

The very fact that our people lived and could only live upon a great external commerce, made tho World War an especial danger to our prosperity. Our ships saved the Allies, but, wc could not save our ships. The harvests of past commerce financed the Allies, but wc could not ensure new harvests. We had to put everything to hazard, and I fear it is true that neither our Allies nor our own people yet realise tho nature of the sacrifices that had to be made. When I consider all that had to be done, how we look our ships out of accustomed trade routes and plied them to get quick cargoes at short distances, how we financed our European friends for two years and seven months before America came into tho war, how wc sacrificed our shipping, even while building up in America a new shipping rival, how we mobilised and sold out dollar securities fo finance tho common cause, how wc, in effect, pawned ourselves to America that the. Allies might be further helped, and how, when peace came, we were confronted with currency and trade dislocations, which struck at the very roots of our commerce, I marvel, not at our difficulties, but. rather at the survival of so large a proportion of our trade.

Facing what difficulties remain, wo can surely get not a little satisfaction from that survival. We have come through greater perils than we over dreamed of, and that should nerve us for what has still to be done. Nevertheless, the facts must not be shirked. It is the fact that in the last three months our exports of goods and services have failed to pay for our imports. Here is an account of the matter in the briefest form. External trade: December 1924 to February 3 925: Imports wore £371,000,00(1. Exports of goods and gold, £249,000,000. Excess of Imports; £322,000.000. Invisible exports (about) £92,000,000. Balance of imports not covered by exports £30.000,000. This adverse position has arisen from the fact that while tho cost of many imports has greatly increased our exports of goods have failed to keep pace with them. Oar invisible exports have suffered reduction both through the selling out of foreign investments during the war and from our repayment of debt to America, while shipping, of course, has been in the doldrums. The statement I have just given is very serious because, if the situation it pictures continued, we should find it necessary to reduce our imports, 'i.e., to reduce the supplies of our people. Does anyone imagine that persons abroad would, or could, continue to send shipload after shipload of food and materials to this country without payment? Is it that there is any means whatever of paying for our all-

essential imports save by exports of goods and services? True, we could sell out overseas investments, as wc did in tho war, to secure imports, but it is a process that could not last long, and each dip into capital would cut off part of the imports receivable on account of interest.

Some amelioration of the above figures is to be hoped for later in the year, in the fall of. the price of corn, but we have to do much more than redress an adverse balance. We have great need to get back fo the pre-war position, when, as I showed in the first statement given above, we not only paid for all our imports, but were able to create a call on the future for further imports.