Nelson Evening Mail WEDNESDAY, DECEMBER 11, 1940 TRADE POLICY IN WARTIME

Nelson Evening Mail, Volume LXXIII, 11 December 1940, Page 4

Nelson Evening Mail WEDNESDAY, DECEMBER 11, 1940 TRADE POLICY IN WARTIME

IF the war is to be won in the shortest possible time it is just as necessary for the Empire to fight in unison on the economic front as on the military front. This means organising our economic resources wherever they may be and bringing them to bear most effectively where they are most required, just as we do our fighting men and machines. But while public opinion is ready enough to approve this with manpower, it is not so disposed to realise that it applies with equal force to the other productive agents, especially where such a policy conflicts with personal interests or long-standing practices in time of peace. Naturally, as more and more of the resources of the Empire become fully employed in production for war, there must be less and less to meet

ordinary civil needs. This means that luxury and non-essential goods and services must be—or should be—sacrificed so that what resources are left after provision for the needs of war can be devoted to production of necessaries. This in turn means that non-essential goods will become less and less available to the consumer. It is, of course, much easier to visualise this principle than to apply it in practice. One thing which makes common sacrifice on the part of Empire consumers difficult is that they are governed by different rules according to the particular Governments under which they live. It is absurd to suggest that the New Zealand or Australian consumer, for example, is being asked to bear anything like the amount of sacrifice in his standard of living that his kinsman consumer in Britain is being asked to bear. And yet there should be an approximation to this.

In other words, it is not fair that a country like New Zealand should restrict non-essential imports from Britain unless such restriction is accompanied by equivalent economies in our own consumption. Otherwise we are penalising the British exporter, for those nonessential commodities arc either being supplied internally from resources which should be going to help the war, or from foreign resources, in which case they mean a drain on exchange funds which should be mobilised for war purchases.

As the war has developed this question of exchange—and especially dollar exchange—has become all-impor-tant. The Empire is in the sterling group but, because it becomes increasingly necessary to turn sterling into dollars to buy from the United States the weapons and munitions of war, it is the duty of the whole Empire—not merely of Britain—to make as much sterling as possible available. More and more does this simple fact dominate British trade policy. It has not always done so, even since the war. In the early days of the conflict Britain advocated the traditional policy of buying all possible war requirements from the United Kingdom. She had arranged to supply Canada and the other Dominions with their requirements in war machines and in machine tools. But colossal losses of war material, combined with Nazi domination of the Continent, changed all that. She soon found that she could not supply even her own needs in these directions and consequently sought the help of the Empire countries and the United States. Thus the direction of Empire trade was largely reversed and it is this policy which is responsible for the ever-growing armament industries of Canada, Australia, India and to some extent, as announced to-day, New Zealand. This temporary suspension of the established idea of Empire trade is having its effect on British export trade, which, however, in the aggregate, is surprisingly buoyant- Applied to the Dominions, the policy is somewhat contradictory. Always with its eyes on the dollar exchange the British Government encourages us not to buy abroad what we can do without, because demand for such things makes corresponding demand on productive resources overseas which might be more usefully employed, makes demands on shipping space which might be more gainfully used and makes inroads into sterling exchange, leaving less available to convert into dollar funds. On the other hand we have trade interests in Britain, and their representatives in New Zealand urging us to keep up our exports from the United Kingdom on the old scale. The United Kingdom Government, however, does not go as far as this. Anxious to protect the long-term interests of the British exporter, it tells us to buy as little as possible from overseas during the war; and what we have to buy, to purchase from the United Kingdom. It has stated definitely that a more selective policy in export trade is inescapable under the demands of war. This, however, does not answer entirely the sharp complaints about New Zealand’s restrictive policy of imports which has been made recently by United Kingdom manufacturing and expqrting interests in the Dominion. In large measure their criticism was directed to a policy which restricted imports long before the war began, and not as a war measure, but in order to practise a selective import policy as a peacetime policy. There is justification for this criticism so far as Mr Nash’s import control prevented the stocking up of warehouses with goods before the war, in preparation for the lean times which we must now endure. At their annual meeting in Wellington, United Kingdom manufacturing and importers’ representatives also complained of inelasticity in the import regulations and even of discrimination in the granting of licenses. This kind of thing is only rubbing salt into the wounds of the already hard hit United Kingdom manufacturers and special pains should be taken to avoid it. At the same time, chiefly because of the attitude of the British Government and its anxiety to husband its resources, in every way possible for war purposes, it does not seem possible that British exports can flow into the Dominions in their former volume until victory is won, or until other financial arrangements can be made which render it less necessary to mount such close guard over the dollar exchange pool.