Britain’s Economic Position: A Note Of Warning

Northern Advocate, 26 May 1938, Page 7

Britain’s Economic Position: A Note Of Warning

(Received 10 a.m.)

LONDON, May 24. rpiE PRESIDENT OF THE BOARD OF TRADE, MR OLIVER STANLEY, IN THE HOUSE OF COMMONS TO-DAY, REVIEWED THE ECONOMIC POSITION IN THE PAST YE AR, AND MADE REFERENCES TO THE TRADE NEGOTIATIONS BETWEEN BRITAIN AND AMERICA, AND' THE POSITION OF THE COTTON INDUSTRY. The Minister said that 1937, apart from weakness toward the close of the year, had been an extremely prosperous twelve months for British trade. There had been hardly a section of British industry which had not been able to increase its profits and production, and where wages had not tended to rise. > In the first four months of 1938, however, there had been a certain slackening in the increase of production. The main reason for this was the fall in commodity prices.

Effect of United States Depression. The second cause was the influence

of the depression in the United States, where the loss of buying power had had a most decisive effect on commodity prices. In 1937, United States’ buyers were purchasing from abroad commodities and raw material at the rate of 81,000,000 dollars a month, whereas in the first two months of this year the rate was only 49,000,000 dollars. Mr Stanley stated that the difficulties of the cotton industry through the fall in prices had increased the importance of the question of reorganising the industry. Adverse Balance Increases. Dealing with the question of the adverse balance of trade, the Minister said that last year this amounted to £52,000,000, compai’ed with £18,000.000 in the year before. The £52,000,000 was affected to some extent by a special transaction in silver, amounting to about £11,000,000, but he thought the adverse balance of £52,000,000 was not in itself frightening. It was true -that the excess of imports of merchandise rose from £346,000,000 in 1936 to £432,000,000 in 1937, but an analysis of the rise showed that it was not due lo a decline in United Kingdom exports, which increased by 9£ per cent. It was due almost ■ entirely to a rise in the price of imported commodities. The figures for the first four months of this year, added Mr Stanley, were not so imposing. In spite of the bel- - of the fall in commodity prices, the adverse balance had increased, owing partly to an increase in imports, but even more to a decrease in exports. British-U.S. Trade.

The Minister said he had already told the House on several occasions of the great importance the Government attached to the successful out-, come of the trade negotiations between Britain and the United States.

Mr Stanley also mentioned the negotiations for a trtide agreement with India, and announced that preliminary negotiations between a delegation from the Lancashire cotton industry and an unofficial advisor in India had broken down. He could not see how it was possible to conclude a trade agreement with India unless they found a satisfactory settlement. Warning To Foreigners. In conclusion, Mr Stanley gave a warning to foreign countries that, much as the Government had desired to give them access to the great United Kingdom, consuming market, they could not any longer afford to make unilateral gestures of goodwill in trade matters. The Government believed in the policy of bilateral trade negotiations which they had carried on during the year, but, to a large extent, the amount of access to the home market given to foreign countries depended not only on the British Government but on foreign governments, and how much access they were willing to give to British exports.