MENACE OF QUOTAS

New Zealand Herald, Volume LXXI, Issue 21742, 6 March 1934, Page 11

MENACE OF QUOTAS

NEW BRITISH POLICY * AUSTRALIAN BANKER'S VIEW SERIOUS EFFECTS DISCUSSED - The mena.ce of the British proposal to impose quotas on exports from Ausifcraliat and New Zealand wits i tressed yesterday by Mr. A. 0. Davidson, gen-, eral manager of the Bank of !Ner South Wales, who, accompanied by Mrs. Davidson, in passing through. Auckland iby the Ao; - angi on his way to England. Mr. Davidson is making a combined business and holiday trip find expects to bti away from Australia for about eight months. Reviewing Australian conditions, Mr. Davidson said the Commonwealth, like New Zeals,nd, depended on world markets bo'h for the prices of :..ts products and on the capacity of those markets to absorb freely the whole of the exportable production. A full measure of recovery in either Australia or New Zealand must depend on world recovery, rising prices for primary products and, at the same tune, an increase in the capacity of world markets to absorb those products. "Apart f;rom this predominating factor," Mr. Davidson continued, "Australian conditions are showing a steady improvement. Her fine wools hs.ve met remarkably higher prices this season and, as wool growing is so important in the economic life of the country, this alone has afforded an appreciable measure of relief to both private and public finance. Outlook lor Other Products "However, anxiety is still felt for the outlook for other Thf future of wheat in still very gloomy and for dairy produce and meat Exceedingly doubtful.

"The depression struck Australia about 18 months or two years: earlier than New Zealand, as prices for wool and wheat collapsed early in. 19:29. New Zealand, on the other hand, had dairy produce and meat forming a la.-ge proportion of her exports in- place of wheat, and she was able to c irry on for this longer period. Now-both countries. are facing the same problems with regard to ihese commodities and both are looking anxiously for some revival in the markets for dairy prod'ice and meat. >-

"Further anxiety is added by the new agricultural policy of Groat. Britain. If the principle of keeping the English market for the English farmer is persisted in to such an extent that quotas are placed on the exports of Australia and New Zealand t> Great Britain, the exports must be curtailed. This policy must have a most serious effect, not only on the economies of Australia and New Zealand, but also on that of Great Britain. llifflculties Involved

"The Commonwealth and the Dominion will be faced with two alternatives. They must either find free markets in which to dispose of their goods, or else they must have forced on them reduced production, which would have most serious effects on public and private finance. If they are prevented from producing as much as they oan and from selling the goods they produce, the inescapable result will be that their capacity to purchase manufactured' goods from Great Britain will be reduced. It :is quite a possible conclusion that, with low prices and, the risk of bad seasons, the British expo: rter and manufacturer might suffer v<;ry considerably js a result of this special consideration shown to the British farmer. "Increased employment in British agriculture might easily be mpre than offset by increased unemployment throughout British manufacturing industries. It is greatly to be regretted," concluded Mr. Davidson, "that Great Britain should have thought fit to enter on such restrictive policies when every effort is necessary toward .tin expansion of international trade."