TRADE WITH EMPIRE

New Zealand Times, Volume XLIX, Issue 11250, 30 June 1922, Page 4

TRADE WITH EMPIRE

THE EXCHANGE PROBLEM INTERESTING SPEECH BY SIR JOSEPH 'WARD. DANGERS OF GERMAN RIYAERY. Speaking at the civic reception tendered to him at Blenheim on Saturday (reports the Marlborough “Express”), Sir Joseph Ward said it was only a matter of time before New Zealand would get over tho difficulties which had followed in tlie path of the war, but he did not think there was an easy road ahead, and there was a lot of hard work to be done before the country could emerge from conditions which were world-wide. These conditions, however, were capable of almost immediate improvement, and he looked forward to brighter times than those through which we had been passing. THE ECONOMIC CONDITIONS. Sir Joseph said that during liis recent visit to Europe he had taken the opportunity to spend a few days touring in Germany and in Belgium and I.ranee, with a view to ascertaining the economic conditions likely to develop there, and, he was sorry to have to admit it, but it was a fact that the country which had received the least damage and was the most ready for the commercial fight was Germany. It was a sad commentary on the losses in- lives and treasures which we and our Allies had sustained in the war to recognise the fact that once the reparation and indemnity questions were got over, the country which would give Britain the moat difficulty in maintaining commercial supremacy was Germany. Their methods were different to ours, and though he would not like to see them adopted by Britain, they gave Germany a great advantage from the point of view of cheap production. HOW NEW ZEALAND WAS HANDICAPPED. One of the disadvantages under which we suffered! in this country, from the point of view of better trade, was the absence of a settlement of the economic conditions between France and Germany, England and Russia, and until the Governments of the great Powers ■ —probably including Japan and even the Soviet Government of Russia—understood the problem of stabilising money, we wouldn’t get an oppor. tunity of developing the country in the way in which we should. If the value of money were stabilised between the countries of Europe and America and Britain and, perhaps, Japan, in all human probability we should get from 25 to 30 per cent, more for the produce we were exporting, as compared with the values ruling to-day. For instance, if at present we sent a million pounds’ . worth of goods to England and they were sent on to Europe for sale, we couldn’t get within oooee of the value of the New Zealand pound note for each pound’s worth. HOW IT WORKED. As an example of the way in which the exchange rate was working agiainst British trade and industry, Sir Joseph said that while in Germany he asked for a quotation for 150,000 tons of steel rails. He did not want the rails, but made the inquiry with a view to obtaining information and for guidance in studying tho German markets as compared with the English ones. The quotation in Germany worked out at £9 per ton less than the lowest quotation he could obtain in England, this representing £1,350,000 on the contract. He might mention that the value of steel rails fell in both countries- later. They would see that the low mark was a terrific competitor when one was trading to or with that country as compared with England. Similarly, he had made inquiries regarding a motor-car (which he did not want any more than he wanted the steel rails). This car was regarded as the finest motor-oar produced on the Continent, and was the Continental equivalent of the RollsRoyce in England. The price of the English car at that time mas £2750, and the price of the equivalent German car worked out at £420. The two instances he bad quoted gave a realisation of whait a difference in the value of money did. AN INTERNATIONAL CLEARING HOUSE. The only way in which the Governments of tho country could put the matter right wto to establish a sort of international clearing house so that if we had, say, ten millions worth of products outside England, we would get the equivalent of ten millions for them, so that we wouldn’t lose anything. The Home Government had devoted 20 millions to attempting to stabilise exchange, but) they might just as well try to jump over the moon as correct the matter that way. lit was like a farmer who required £15,000 to get him out of difficulties asking someone to lend him half-a-orown to put himself right. (Laughter and applause.) Tho only way to set matters right was to establish a clear-ing-house so thait we would get twenty shillings for every pound’s worth of goods, whether landed in Germany, or France, or any other country. LONDON THE FINANCIAL ' CENTRE. Sir Joseph said that nowadays a lot was heard in some quarters of the possibility' of New York taking Loudon’s position as the financial centre of tho world, but, in his view, that time would never come. London could bo reached from any of the European capitals, bar Petrograd, within 24 hours, whereas a trip to .sew Vork meant at least a fortnight’s travelling there and back. The big financiers could assemble in London practically at a moment’s notice, and his hearers hardly needed telling that mo6t financial matters were settled across a table and not by letter or telegraph. NEW ZEALAND’S GREAT FUTURE. Sir Joseph went on to refer to the reduction of naval strengths, of which he said he heartily approved. Indeed, ho claimed that lie was one of the first to suggest the resolutions ultimately adopted by the Washington Conference. He remarked that we were apt to complain about our isolation, but his view was that our isolation was a great source of strength, ns was our insularity. He had studied the matter, and he believed that New Zealand would, in the future, lie the dominant | Power of tho Pacific. People talked of < Australia in that capacity, but they had not looked at the matter carefully. The map of the work] showed only three countries somewhat alike in outline and area—Britain, Japan and New Zealand —and an insular and compact country would always be great because of its mobility of transport. For instance, if a ship left Sydney for England and another set out to sail round the coasts of Australia, the first would roach England about the same time as the second completed her circuinnavi-

gation of Australia. But in New 7,oi!and a steamer could sail round the country in throe or four days. There were CoO million people watching the* waters of the Pacific, as it were, and wo numbered only a million and a quarter in Now Zealand: tsti’,l, we had the strength of our isolation r;nd th* strength ol out insodnr position, and we would go on growing m power and influence, al.vny* provided that we maintained our association with thr British Empire. (Applause.)