EMPIRE TRADE POLICY.

New Zealand Herald, Volume LIX, Issue 18279, 21 December 1922, Page 11

EMPIRE TRADE POLICY.

NEED OF CO-OPERATION.

THE GREAT EXHIBITION

BY ArSTIN HAF.RISON. (Kditor of The English Review.)

Visualising the great gap made in oW exports capacity by Europe's inability to buy. consequent on the mad exchanges, our thoughts almost, instinctively turn to that vast exploitable field known as the Empire, which still remains largelv untapped, almost ludicrously unpopulated, the natural nursery and reservoir of all our wants, What we have lost in Europe, we shoula be able to make up in the Empire. If the market of Central Europe, representing, say, £80,000,000 a year, has gone, we can sell that equivalent to the Colonies, and on paper the proposition looks rosy enough. Nothing is easier than to prove that the Empire can gTow everything and that, as_ such, it should be a completely self-contained, selfsupporting unit, as Independent of the European market as is America, and "lis flourishing. Had the Empire developed along the lines of economic reasonableness, as a single unit, this condition would undoubtedly be a true potential; but the Empire is not an economic whole. We cannot thus finance on the Empire, which is a conwies of independent units whose several developments d'ependnot upon our homo production, but upon increased production, population, and capital in tho respective colonies. A few examples will show the nature of the difficulty. In 1920 we could not export to Australia becauso Europe could not buv Australia's wool. Similarly with India's tea owing to the collapse'of tho Russian market. Our selling power to the Colonies was dependent upon the Colonies' selling power to Europe. We cannot finance on the colonies—that is the point. _ When_ the selling power of the rolonies is restricted owing to European difficulties, our exports are restricted to the colonies We at* a world emnire and trade is interdependent. The problem narrows down to a self-evi-dent claim of preservation. It is how to fill v.r, the Fmonean pan-(1! as regards the loss of our European sales, (2) as regards the loss of the colonies*' European sales. In a word, can we so arrange our respective sales and purchases so as to be practically independent of alien markets. Sentiment Not Economics. Under a Zollverein of course we could. But even as an idea this solution is ruled out because the colonies will not look at it. Our pre-war theory of Empire died in the war. The very word " Empire " is not colonially popular; a better word' is " Commonwealth." Certainly the political conception on Roman lines of an Empire centrally run from London, aa expounded by a group of pro-consular theorists, was shot up in the war; the tendency is rather the other way. Yet the spirit is strongly cohesive, even astonishingly so. The bond of speech, of tradition/ of culture and civilisation, is real and living, and perhaps this link is a deeper intang ; ble power than any treaty of commerce ever could be. Now the axiom of trade is to buy in the cheapest market and sell in the dearest, and the fact must be faced that our colonies are reversing the law by buying our higher priced goods for sentimental reasons. _ Can that inversion of economic law continue? If not, and almost inevitably it will not continue, what is the solution to our problem of Empire developing on the lines of separate competitive units? It looks like Tie Tocnnpville's epigram about the rine fruit". We ought surely to be considering the matter pretty carefully. Tariff Reformers say frankly that the only solution is the rearrangement of the currents of trade, which of course means Imperial preference. If. they argue, the European gap is to be filled, we must see to it that the currents of trade are diverted from Europe to within the Empire, just as Australia, since the war, refines all her lead ore production, 46.50 per cent, of which before the war was refined in the smelteries of Germanyj. Preference is, of course, a controversial subject and cuts both wavs ; no doubt there is a great deal to he said for it. But the larger aspect of the question is disturbing. Tariffs lead to tariff wars. One of the worst features of the post-war world" is. this frenzied tariff barrier system which has so largely contr'buted to the breakdown of financial Europe. Man must co-operate or fight. If the world is to be reconstituted on systems of Protection, it is mere futility to talk of ending war. or peace, or any hope of a "new order," nor does there seem any likelihood of arriving at that harmony of capital and labour essential to prosperity. Our danger is that which confronted Rome from her far-flung dependencies, for that, too. was economic. It is the human factor versus the system.

The Hard Facts Berfore Britain.

To-dav, we are undoubtedly faced with enforced emigration which will for the most part go to the colonies. Men say for every hundred colonial settlers we have a hundred potential buyers. is so theoretically, if we rule out prices or comEetition. But as the exodus increases our ome purchasing power decreases, so that in process of time the purchasing power will lie without the country, in which case our producing power will diminish. Were we to emigrate 2.000,000 workers this vcar, wages here would not fall, and it is an open question how long the colonies will buy dear for Imperial reasons. Cynically stated, our interest would he to industrialise the Empire on cheap or coloured labour coupled with a wise emigration policy. The colonies, on the other hand, want to increase our home purchasinsr power so as to develop and maintain their prosperity. The prohlem is sentiment or good-will versus the cruel laws of economics. It is we who are in straits, not the colonies. We have this desperate fact to wrestle with. Our exports in 1921 were £703,000,000. Now we have to find for pensions, interest on debts and sinking fund, about £500,000,000 per annum. Faced with that staggering proposition, unless wo are Drepared to devaluate or write down, it does not. look as if we could afford to neglect any market for any reason whatsoever, still less that we can afford to write off the purchasing power of the world as neglible (amounting ,to £104.425.410 in 1921), in view of the keen and new competition from countries like France and Japan and of our low output per head, and the unpleasant certainty that we, perhaps alons of the belligerents, are unlikely to refuse the burden of onr obligations.

Empire Conference Urged. In 1924 the British Empire Exhibition is to be opened' at Wembly Park. We shall see gathered there the products of the whole Empire ; it will probably be a land--•:>rk in our history. Our entire economic future is bound up with the Empire, and if we cannot find ways and means to make the Empire self-containable and to obtain the basis of a common economic interest and policy, then there must be something rotten in the state of England. A conference of Empire is needed to restate the whole position. We can drop the old Imperial, plan and with it th« proconsul conception of development. The plan should be Empire economics. Can we advantageously finance on one another ? If not. what? If we can. and of course a policy could be found, then a great human work lies before us in which our civilisatio" wi'l be tested and proven.

The last Imperial Conference ended in pious affirmations, chieflv because the colonies disliked our Public School Empire noliti'-s -"'d we shirked facing the real issues. We ought to begin afresh. An immense work awaits our efforts in FgyDt. The ouestion of Australia's " right " before O'O world to refuse colonisation needs careful consideration. Given the readiness <o f-orcrate, the Emmie 'hn-ild M lei c t be able to come to some basis of trade nolicv. which is nerhans all thot we need aim at. No rap'd results can be rvpected, and the "/hole problem bristles with human difficulties ranging from go-slow to the foreign exchanges and the controversial question of coloured labour. A beginning should he made. It is to be honed that bv the time the British Empire Exhibition opens public feeling will be alive to the enormous importance of the . Empire to Britain and of Britain to the Empire. J