BRITAIN'S TRADE

New Zealand Herald, Volume LXXI, Issue 21859, 23 July 1934, Page 8

BRITAIN'S TRADE

The Westminster Bank, in an industrial review, raises the question whether the recovery movement has not reached its zenith, and whether the limit of expansion of the home market has not been reached. Sir Josiah Stamp, in a recent speech, gave expression to similar thoughts. A good part of the salvage work, he said, was over, and much of the recovery programme well under way. No one, however, could yet sec any clear prospect of a recognised equilibrium between home and foreign trade, between the division of resources, between spending and saving, or between home and foreign investment, all of which were vital to the stability of a new order. Recently there had been a distinct slackening in the rate of. improvement, and the indications were that in certain industries the immediate limits of demand in the domestic market were being reached. So far improvement, as gauged by the fall in unemployment figures, has been more than satisfactory, particularly when comparison is made with the position of other countries. The tariff helped to create a new domestic market, and enterprise was quick to grasp it. But, as Sir Josiah Stamp and the Westminster Bank review agree, it is to a revival of the export trade that Britain must look for economic deliverance. Some progress is being made, chiefly by virtue of the trade agreements which the Government is making with various foreign countries, but the outlook still is dark, because of the barriers that face the manufacturer over the greater part of the world. The common doctrine of selfsufficiency makes a stubborn problem, which the World Economic Conference hardly elucidated, much less attempted to solve. Thus what has been called the hard core of unemployment continues everywhere. In Britain it is located in

those industries, such as the steel group, which cannot prosper without a world market. In the past a considerable amount of the trade represented foreign lending. No longer is there complete freedom in this sphere of finance, and in any case few debtor countries are able to adopt a policy of development which would necessarily give trade to the heavy industries and freights to the ships carrying their goods. Because of the uncertainties that surround future export trade in manufactures, economic nationalism has developed unexpectedly in Britain itself. It contains the element of self-defence, but every restriction upon imports, particularly in the way of quotas, is liable to bear its penalty in further closing the export market. There certainly is a strong case for making the Empire an economic unit and building outwards as opportunity appears.