ENRICHING A COUNTRY.

New Zealand Herald, Volume LXV, Issue 19929, 24 April 1928, Page 14

ENRICHING A COUNTRY.

Sir, —In answering the proposition by "Equilibrium is Best," that "exports impoverish, imports enrich, a country," I expressed the opinion that he had advanced a fantastic and irrational doctrine. In attempting to disprove that the apparently "conclusive case" propounded by my lettei', he has now offered an illustration that is simplv an exaggerated version of the view I presented. I suggested as reasonable and desirable "so large a surplus of exports as' would permit the investment of the excess abroad" or its use to discharge overseas debt. Your correspondent suggests that there should not be any ianports but that for ' ten years, the proceeds of £50,000,000 worth of exports annually and the interest on the loans should be invested. It is an extravagant proposition, but theoretically it is not impossible for a country to become so completely independent and to increase production so largely that this could be done. How then would the country be impoverished? Suppose a millionaire to be marooned for ten years on an uninhabited island. His secretary invests the whole of his roaster's income, including the interest from the new investments, until the millionaire is rescued. Would the latter have been impoverished ? But if a country—a debtor country, as New Zealand is? —were able to import £50,000,000 a year without exporting any commodities, what would its position be ? Long before the end of the decade, the sinking ship would have been deserted and the bailiffs would be in possession. Theoretically, an isolated country could be wealthy and prosperous without any external commerce, but in actual practice, one such as New Zealand having external liabilities and dependent on external commerce cannot increase ita wealth by importing more than it exports, The process of "enrichment" recommended by your correspondent—whose signature is quite inconsistent with' his theory—would simply involve a progressive increase of the national indebtedness and neither a nation nor an individual can be wealthy on debts.- Economy.