WORLD AFFAIRS

New Zealand Herald, Volume LXXIV, Issue 22670, 6 March 1937, Page 16

WORLD AFFAIRS

BRITAIN'S POSITION ARMAMENTS AND TRADE VIEWS OF LORD McGOWAN A review of world conditions, particularly as they have a bearing on the British Empire, was given in an interview yesterday by Lord McGowan, chairman and managing director of Imperial Chemical Industries and a leading British industrialist, who is in Auckland in tho course of a business visit to New Zealand. Lord McGowan also commented on the present British armament programme and its effect ob trade generally. " There is an erroneous impression," said Lord McGowan, "held by certain people—mostly pacifists —that armament companies do all they can to promote war in order .to sell their products. That opinion was effectively scotched by the committee set up by the British Government some time ago to consider whether the manufacture of munitions of war should be taken out of the hands of private enterprise and nationalised. Industrial Revival " While war makes demands on companies manufacturing warlike stores, it considerably upsets ordinary commercial activities, due to the economic disturbances which it causes. Recovery is a slow and painful process, as was evidenced after the termination of tho 1914-18 catastrophe." Referring to trade conditions in Great Britain, Lord McGowan said improvement had dated from the alteration in the fiscal policy determined upon by the National Government. It was realised that the present was a protectionist ago and Britain had to takG care of herself with the only weapon available. Since then there had been an all-round expansion in trade, with the improvement spread over practically all the major industries. A Note ol Warning " The point of saturation, if it were visible," Lord McGowan continued, "has been put back for some time because of our commitment to a great defence programme, rendered necessary by the race for armaments throughout the world. By the expenditure of these enormous sums on defence, I think we can see a continuance of a high state of productivity for at least two years ahead. Our present prosperity is not really due to defence expenditure; we are only just beginning to feel the benefit in this direction. "It is a pity that we have to pay this great insurance premium for safety, as the expenditure on armaments does not produce revenue. The world would be far better if this vast amount of money could be diverted through the ordinary channels of trade. But peace can only be attained when European nations realise that Great Britain is prepared for war." A note of warning was sounded by Lord McGowan when he said the present era of prosperity could not be permanent. Accordingly, he advised industrial concerns to put their houses in order and lay aside from the surplus earnings of to-day sufficient to equip themselves with up-to-date plant so as to be able to face a future recession of trade. Interest in Dominion " I am visiting New Zealand for the first time," Lord McGowan said, "but I hope it will not be the last. I feel the necessity of constant visits abroad by business leaders from my country. My own company is spending over £1,000,000 in the erection of an alkali ] plant in Adelaide and what we have done in Australia we shall do in New Zealand when the economic position justifies that action. In any case, wo shall always be willing to give the Dominion whatever help we can in tho solution of its industrial problems." Lord McGowan spent the greater part of yesterday visiting various centres of his firm's activities in the vicinity of Auckland. He will leave by the Monterey on Monday on his way back to England.