THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, JANUARY 29, 1930. COLONIES AND TRADE.

New Zealand Herald, Volume LXVII, Issue 20475, 29 January 1930, Page 12

THE New Zealand Herald AND DAILY SOUTHERN CROSS WEDNESDAY, JANUARY 29, 1930. COLONIES AND TRADE.

A first step toward® realisation of his policy of Empire free trade is now advocated by Lord Beaverbrook, who proposes that a beginning shall be made with the Crown colonies and dependencies. The campaign he launched, conducted with characteristic vigour, has already caused the subject to be discussed widely. If the comment has not always been favourable, there has been enough of it to show that Lord Beaverbrook has at least succeeded in attracting a good deal of attention to the cause he has deliberately proceeded to espouse. It is impossible to consider it even in the most elementary way without recognising a whole series of difficulties at the very beginning. Over-emphasis of them appears much like throwing cold water on the policy, but it is useless to approach it with an attitude of unthinking optimism. The fiscal autonomy of the Dominions, and tho definite way most of them are committed to a policy of protection for the manufacturing industries they are trying to establish, must be recognised as the first stumbling-block. Hence the advocacy of the non-self-governing colonial empire as the starting point, with the suggestion that it should be the channel by which the Dominions would be attracted to the scheme. At the outset this appears a feasible way of attacking the problem if the policy gains recognition by any of the political parties in Great Britain. Yet it would be a mistake to imagino that even with the colonies it would be no more than a matter of a few ordinances or regulations, after which they and Great Britain would become one economic unit. Here again difficulties must be recognised. To all that Lord Beaverbrook says about the size, richness and economic strength of the colonial empire, a ready assent can be given. Most of the territory lies well within the tropics. This is natural. Where land has come under British rule in latitudes suitable for white settlement it has been readily colonised by a steady stream of migrants who have settled themselves permanently. An inevitable result has been the demand for self-government, granted as soon as the necessary power to administer it has been proved to exist. The opposite side to this process means, logically enough, that the British territory which has not become self-governing has remained with the status of colony because it has not been suitable for systematic white settlement. The test condition is whether children born of European parents can be brought up in the country. If they can, its eventual destiny as a self-governing Dominion is assured; if not, it is likely to remain a colony permanently. It follows then that the wealth of those British possessions which, after the lapse of many years, remain as Crown colonies, lies in tropical products, or possibly minerals. All that Lord Beaverbrook says about the extent and richness of the colonial empire is true. It is equally true that that empire can produce, and broadly speaking, does produce, every variety of tropical product demanded by the markets of the world. In some the Empire has a virtual monopoly, in some its strength is such as to make it the dominant force in the market. Rubber is an excellent example, as was proved while the Stevenson plan for regulating output was in operation. It follows, further, that the products of these lands are, for the most part, raw material, or foodstuffs. Sometimes the second-named are in a partly manufactured condition, as with raw sugar or cotton that has been ginned. - Yet even when the exports are destined to be turned into manufactured products, only the first elementary processes are, as a rule, undertaken in the country of origin.

It is a natural consequence that the colonies, almost without exception, have no protective duties to be a barrier to the establishment of free trade with Britain. It does not follow that they have no customs duties. These are levied very generally for revenue purposes, and in most of the colonies they arc the most important item of public finance. Here enters the first difficulty in the way of Lord Beaverbrook's plan. It cannot be applied without an immediate and universal disturbance of the financial systems of the colonics. It is true that if the products of Britain are to be admitted duty free, and those of other countries are still to be taxed, there remains a revenue to be collected. Yet, since the whole objective is to increase Britain's share and to decrease the foreign shave in tho trade of the colony, the more it succeeded tho more tho revenue would be attacked. It is not inconceivable that this difficulty could be overcome, but it must not'be forgotten that to attempt it would mean disturbing finance, and conse-

quently administration, over a very wide area. To find alternative sources of public income would be a task of both difficulty and delicacy. Another factor of a more commercial nature must also be considered. The adjustment of markets, in endeavouring to direct trade to purely Empire channels, would be no light undertaking. Consider the West Indies as a typical instance. So far as they are engaged in growing tropical fruits, the United States is the nearest, the largest, and the most natural market. Jamaica, where bananas are the most important item of export, sold goods valued at £2,016,300 to the United States in 1927-28, < compared with £913,425 worth despatched to Great Britain. Similar instances could be multiplied, and it is often doubtful whether Britain could, however willing, offer a market equal to that found in foreign countries. The existence of this export connection means the import trade is given every opportunity to flourish, and the detaching of it for Britain's benefit would not be easy. None of this means that there is no opportunity for improving the trade relations between Britain and the colonial empire. The objective is well worth pursuing, but tho enthusiasm Lord Beaverbrook seeks to create must be accompanied by a clear-sighted recognition of all that is involved, especially of all the difficulties to be encountered.