THE OTAGO DAILY TIMES TUESDAY, JANUARY 26, 1927. INTERNATIONAL COMMERCE.

Otago Daily Times, Issue 20006, 25 January 1927, Page 8

THE OTAGO DAILY TIMES TUESDAY, JANUARY 26, 1927. INTERNATIONAL COMMERCE.

While the efforts that arc being made to develop inter-imperial trade and to utilise the latent resources of the British Empire are bearing good fruit, slowly it may be, it is to be regretted that well-meaning advocates of Empire development like Mr Benjamin Morgan, chairman of the British Empire Producers’ Organisation, should be antagonistic to movements intended to assist the economic recovery of Continental Europe. The recent proposal to reduce the number of tariff barriers in Europe originated with British bankers and industrialists for the reason that the commercial welfare of Britain is intimately connected with that of the Continent. Mr Morgan considers that the arrangement of reciprocal commercial agreements between Great Britain and the proposed European Customs Union would greatly handicap Imperial relations from the viewpoint of Empire development and delay 'for 20 or 30 years the full development of Imperial preference. The idea of the complete development of the internal commerce of the British Empire does not imply any wish on the part of the British peoples to isolate themselves commercially from all the non-British world. Far from it. In a world in which means of transport and facilities for communication between all countries have been established that literally have the effect of annihilating distance, commercial isolation is as impossible' as it is undesirable. If such a thing were the ultimate aim of the British Empire, our advocacy of, and participation in, a League of Nations would be a hollow sham. The Treaty of Versailles granted freedom to oppressed peoples by creating several additional small nations in Europe. In one sense, this has been a great boon to these races. But the creation of tariff walls by these small national units, in the exercise of their undoubted right, has hindered the economic recovery of Continental Europe. Modern industry depends upon large-scale production! Large-scale production cannot be maintained without extensive markets. The 30 tariff barriers of Central Europe, if continued, will make large-scale production distinctly difficult. As was put in the bankers’ manifesto: “The break up of the great political units in Europe dealt a heavy blow to international trade. One State lost its supplies of cheap food, another its supplies of cheap manufactures. Industries suffered for want of coal; factories for want of raw materials. Behind the Customs barriers new local industries were started with no real economic foundation which could only be kept alive in the face of competition by raising the barriers higher still. . . . Production, as a whole, has been diminished.” The future lies with groups of nations. The British Commonwealth already forms one distinct group; the United States, a second group; Continental Europe, exclusive of Russia, a third; Russia and Siberia, partly in Europe and partly in Asia, make a fourth group. There need be no implication that the groups are hostile to each other, although they are competitors for the world’s markets. At present Continental Europe, excluding Russia, with an area of 2,100,000 square miles, subdivided by 26 tariff fences, has to compete in production with the United States, with an area of three and a-half million square miles without a single tariff barrier and with an assured home market of nearly 120,000,000 people to be supplied. Mr Henry Ford remarks in his latest book that a part of Europe’s trouble is that so much of its goods has gone abroad in the past that there is little thought of really having a home market. But the formation of a Customs Union in Central Europe would mean a great development of Continental resources by the organised effort of 300,000,000 people, with an even larger home market to cater for than that of the United States. Economic union would afford scope for specialisation in different districts and would give an opportunity to reduce the cost of production by standardisation and by the adoption of other American methods. It is a mistake to suppose that this union is aimed against Britain. It was not considered advisable for Britain to accept the invitation to join it. Had Britain entered the proposed Pan-European industrial and commercial entente there might then have been some ground for Mr Morgan’s fears for the future of Empire development. But the movement has been wisely encouraged, if not originated, by British bankers and industrialists, who realise fully that the prosperity of Europe is one important factor in Britain’s wellbeing.