THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, SEPTEMBER 8, 1821. BRITISH TRADE OUTLOOK.

New Zealand Herald, Volume LVIII, Issue 17881, 8 September 1921, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. THURSDAY, SEPTEMBER 8, 1821. BRITISH TRADE OUTLOOK.

The signs of revival in British trade, to which the cables have made reference several times recently, are the not altogether unexpected result of the coal peace. Actually an improvement was taking place when in the critical spring months the coalminers stopped work and dashed the hopes which had already been too long deferred. For three months British industry was paralysed by the strike. The trade returns by value which are published month by month do not indicate the full extent of the decline because of the change in monetary standards. The stagnation of trade is r&ore fully revealed by the statement that during the period from January to May inclusive the volume of British imports decreased by over 7,000,000 tons, or 33 per cent., compared with the corresponding period of 1913, the exports of coal declined by 24,278,000 tons, or 80 per cent., and exports of other merchandise showed a falling off of 3,389,000 tons, or over 50 per cent. The tonnage figures for June and July are not yet available, but the gross values suggest that they continue the tendency for each month to be worse than its predecessor. Possibly August will mark the turning point, but since the export of British coal is still small the improvement will not be marked. The only comfort to be drawn from the figures is that owing to economy —to a large extent compulsory economy—in consumption and the reduction of imports the adverse trade balance shows a shrinkage from the level of last year. Comparing the first six months of each year the adverse balance in 1920 was £259,679,000 and in 1921 £163,110,000. The invisible exports have also principally owing to the fall in freights, but even allowing for this the actual trade balance would appear to show an improvement. The best omen for British trade '"s that world conditions have been slowly improving during the period of the coal strike, and if an improvement was visible in the spring it should be even more marked now, provided British industry is prepared to take advantage of it. Of a disposition to work with greater efficiency and goodwill there are happily many symptoms. The coal strike disposed, though after a most disastrous struggle, of the major industrial dispute, and its lessons were not lost on other bodies of workmen. A strike in the engineering industry was averted at the eleventh 1 hour, and with the settlement of the textile dispute the industrial horizon may be said to be clearer than at any period since the armistice. The British workman was slower than his American cousin to accept reductions in wages corresponding to the fall in the cost of living, but the hard facts of the coal strike and the serious decline in industrial profits have convinced him that the wage level of the boom period could not be maintained. There are also encouraging signs of increased efficiency—the individual output in the engineering trades, for example, has improved—which give the British manufacturer a little more confidence m laying his plans to compete against Germany and the United States, where labour is undeniably efficient and industrious These are the domestic factors making for a sounder basis of trade. Among th« external factors may be included the considerable improvement in some of the Continental exchanges, the reduction of accumulated stocks, and an easier credit position. The reaction in trade which succeeded the boom commenced in the East, and many good judges have expected the first signs of improvement to come from the East. It is, therefore, perhaps not without significance that Indian oversea trade is increasing, and in China there has been a substantial reduction in stocks of unsold goods.

The central, and to the manufacturer the saving, feature of the international trade position is that the world is still hungry goods, and the nations which can bring the cost of production within the world's purchasing capacity will not lack for business. There is no unemployment problem in Germany, largely because Germany can quote very low prices, but it is the misfortune of the British manufacturer that he finds peculiar difficulty in bringing his costs down. The recent wage adjustments will help a little ; an increase in individual output would help still more. To give a particular illustration, ships are nowbeing sold at s.bout two-thirds the cost of new construction, so that until shipbuilding becomes cheaper there is no prospect of a revival in that industry. The readjustment of prices is still going on—there was recently a substantial cut in finished iron and steel —but it would be facilitated by a reduction in the cost of coal, which in spite of the lower wages now paid remains dear, and bv the re-establishment of the coal export trade, which would react favourably on shipowners' problems. Export is, as ever, the barometer of British prosperity, and no revival of the houie trade can alter that fact.

one iota. The fostering exports is all greater because three months of the most favourable season of the year have been lost. The leeway mil not easily be made up, but it can at least be said that the better temper of labour and the more stable industrial conditions succeeding the coal strike give the British manufacturer his first opportunity of organising his business on something like a permanent competitive basis. So far the sequel <>f economic events since the armistice has'resembled very closely that fol lowing the Napoleonic war. Then, as now, peace was followed by • a great outburst of speculation. There next came a period of nervousness, a heavy fall in prices, great; difficulties with labour, and reductions in wages. The depression lasted from 1816 to 1822. It was succeeded by a period of activity and expansion. The parallel has been close, and it is reasonable to expect that the greater recuperative powers of modern industry will shortly bring a return of prosperity. In that prosperity Great Britain will share if she enjoyß approximate industrial peace, which has now become an essential condition of her existence as an industrial nation.