OTTAWA NEGOTIATIONS

Otago Daily Times, Issue 21723, 15 August 1932, Page 7

OTTAWA NEGOTIATIONS

CURRENCY COMMITTEE’S REPORT EVIL OF FALLING PRICES MONETARY POLICY OUTLINED AGREEMENT AMONG TRADING NATIONS (United Press Association.) (By Electric Telegraph—Copyright.) OTTAWA, August 12. The heads of the delegations adopted the Currency Committee’s report and authorised its publication. The report ■ays:— , ... 1. That a world-wide rise in the general levels of wholesale prices is in the highest degree desirable. The evil of' falling prices must be attacked by Government and individual action in all eases, whether political, economic, financial, or monetary. 2. The' Governments represented at Ottawa record their conviction that international action is urgently necessary. They announce a desire to co-operate with other nations in any practicable measures for raising wholesale prices, 3. In investigating how to help raise prices the conference recognises that Britain’s central position, not only among the Empire countries but in world trade and finance, inakes Britain a main factor in anything that can be done. The conference,' therefore, welcomes the following statement made by Mr Chamberlain “ His Majesty’s Government desires to see wholesale and sterling prices rise. The best condition for this would be a rise in gold prices. Absence of a- rise in gold prices inevitably imposes limitations on what chn be done for sterling. A rise in prices cannot be effected by monetary action alone, since the various other factors which have combined to bring about the depression must also be modified or removed before a remedy is assured. The British Government, nevertheless, recognises that an ample supply of short-term money at low rates may have a valuable influence. The Government is confident that the. efforts which have successfully brought about the present favourable monetary conditions can, and will, unless unforeseen difficulties arise, be continued.” 4. The conference recommends that the British Commonwealth should act in conformity and in line with the policy indicated in Mr Chamberlain’s stateent as far as lies in its power. The primary line of action in the monetary sphere towards a rise in , prices should be • the creation and maintenance—within limits of sound finance—of such conditions as will assist revival and enterprise of trade. These conditions include low rates of interest and the abundance of short term money. The rate, of interest on all various types of loans should be kept as low as financial conditions permit. It is necessary at the same time that these favourable monetary conditions should bo achieved, not by the inflationary creation of additional means of payment to finance public expenditure, but by an. orderly monetary policy, safeguarded, if the necessity should arise, by such steps as will restrain and circumscribe the scope of violent speculative movements of commodities or securities. It must be remembered’., that .the success of such a policy would be hampered, and might be nullified, by failure to modify or remove important . nonmonetary. obstacles, many of which are international in character and require an international remedy. The British Commonwealth should, nevertheless, take all steps in its power to increase public confidence, -especially in the field of business enterprise, and. to facilitate trade. ; 5. The conference recognises the great Importance to traders of exchange stability , in as wide an-area, as possible. A complete solution of this problem must await the restoration of a satisfactory working of an international standard. Meanwhile, pending such a- solution, the conference considered the possibility of achieving valuable results in two directions—first, by creating an area of stability among countries regulating their currencies in relation to sterling; and, secondly, avoiding wide day-to-day fluctuations between sterling and gold, , Regarding fluctuation between sterling and gold the conference noted with satisfaction that Britain has already established machinery aimed at preventing wide fluctuation in sterling and gold value caused by speculative movements. Regarding the area of stability, the conference recognises the value of- countries within the British Commonwealth whose currencies are linked with sterling maintaining stability, between their exchange rates, and the conference looks to a rise in the general level of wholesale prices as the most desirable means of facilitating this result. •' 6. The conference recognises that the ultimate aim of monetary policies should be the restoration of a satisfactory international monetary standard. Such a standard should function not merely to maintain stable exchange rates between all countries, but* also to ensure smooth and efficient working of the machinery of international trade and finance. This postulates an international agreement among the world’s great trading nations. While certain States represented at Ottawa hold very different views on the question of the most desirable standard, the conference refrains from making any recommendations on the subject in view of the fact that the question will shortly be discussed at the international conference. However, there are several conditions precedent to the reestablishment of any international monetary standard, the most important being, first, a rise in the level of commodity prices to a height more in keeping with the level of costs, including the burden of debt and other fixed And semi-fixed charges; secondly, adjustment of political, economic, financial, and monetary factors, which caused a, breakdown of the gold standard in many countries, which, if not adjusted, would inevitably lead to another breakdown of whatever international standard may be adopted. The conference emphasises that it is «f the utmost importance to the future working of any international standard that international co-operation should be ■ecured and maintained with a view to ■voiding, as far as practicable,t wide fluctuations in the purchasing power of the standard of value. DELEGATIONS CONFER EXAMINATION OF PROPOSALS MR BALDWIN’S ADDRESS ON MONDAY. (British Official Wireless.) RUGBY, August 12, At Ottawa to-day the United Kingdom and Canadian delegations continued their joint examination of the Canadian proposals, i The British delegates also conferred with the,Newfoundland delegation. OTTAWA, August 13. (Received August 13, at 5 p.m.) The ‘ Anglo-Canadian and Anglo-South African delegations met the Canadian delegation and discussed possible bi-

lateral arrangements with Australia, New Zealand, South Africa, the Free State, India, Newfoundland, and Rhodesia., A spokesman said that things were going rather well. A British official deliberated with Australian and New Zealand officials. The British delegation further negotiated with the Australian delegation, and it is announced that the first public speech of any delegate to Ottawa will be made when Mr Baldwin will on Monday, address the Canadian Club. MR BRUCE’S VIEWS BENEFITS TO AUSTRALIA LOW INTEREST RATES. OTTAWA, August 12. (Received August 13, at 5 p.m.) Mr Bruce states that he sees importance in the currency report and the British Government’s declaration that a rise in price levels is essential. Britain, in effect, says that the existing conditions of cheap money are the best contribution she can make towards increasing prices, and the policy of the past three months was deliberately designed in this direction —namely, bank rate reduction, conversion of loan and the Bank of England’s policy of buying securities on the market, thus getting more money available. “It is a satisfactory declaration,” he added. “My views are well known, and can be interpreted that Britain will continue her present policy. It is a good starting contribution and means much for Australia, which is faced with the position that she practically cannot pay her debts. Only the recent good seasons have pulled her through so far.” He added that the policy of low interest rates had special significance for Australia because it would give her a chance of converting securities which are shortly falling due. Mr Bruce considers that Mr Chamberlain has gone a step further than - his May speech in the House of Commons. The report, he says, removes the apprehension that Britain was likely to plunge back to gold before the conditions which necessitated a departure from it are remedied. BUSINESS PROCEEDING APACE i ■ ’ —; —r ■ * WEEK-END TRIPS CANCELLED. ‘ ■ ;_l OTTAWA, August 13. (Received August 13, at ; 5 p.m.) The conference business is proceeding with such intensity and earnestness that 'many of the Ministers have cancelled week-end trips, and aroj determined to get things done. ' BROADCASTING SCHEMES FOR THE FUTURE. ' v- OTTAWA,,August 13. j (Received August'l4, at 5-5 p.m.) * Mr Coates does not expect, owing to pressure of conference business and the limited time available for far-reaching decisions, that a broadcast talk will be possible at Ottawa.- He does not regret bringing- the matter before the conference, as'it may encourage a greater exhibition of British films, and strengthen And co-ordinate broadcasting. The British Ministers endorse Mr Coates’s claims for a film quota. The mechanical recording of events when they occur-at a time unsuitable for dominion reception offers a new field for broadcasting. The events could even be mechanically recorded at the receiving end and rebroaddast later.; Plans along these lines, also for the closer'linking of the great broadcasting organisations of the World,' will be discussed at the Madrid Conference. MR COATES’S COMMENTS REVIVAL OF PRICES DISASTROUS, DBFLATORY POLICY. . ... OTTAWA, August 13. ; (Received August 14, at 5.5 p.m.) Mr J. G. Coates (New Zealand), commenting on the currency report, said: “It is a. valuable contribution, embodying a pronouncement by Mr Chamberlain, which is of even greater significance than first appears. Cautiously guarded in expression, it definitely accepts the raising of prices as the object of Britain’s monetary policy. Nothing can be more valuable to New: Zealand producers. The discussions leading to this report have convinced me that action will be taken to ensure a revival of prices. - There is nothing in the report prejudicing New Zealand’s power; to regulate its own monetary affairs. I welcome Mr Chamberlain’s declaration as marking a milestone in Imperial co-operation and turning away from the disastrous deflationary policy or drift of the past two years.” A TRYING DAY DELEGATES HARD AT WORK. OTTAWA, August 13. (Received August 14, at 5.5 p.m.) Mr Bruce and Mr Coates to-day had the most trying day of the whole conference. They were closeted with the British Ministers from 9 o’clock in the morning till 5 o’clock at night. Then Mr Bruce rushed to the golf course -to take his mind off the ordeal. CANADIAN PROPOSALS BRITAIN TO GRANT PREFERENCES. OTTAWA, August 13. (Received August 14, at 7.30 p.m.) It is learned from the highest Canadian source that negotiations with a section of the British Ministers have reached an advanced stage, Britain agreeing to grant preferences to Canadian lumber, wheat, and canned fish, particularly West Coast salmon. The question of textiles may be solved by establishing a tariff- board, for which Canadian legislation of 1931 provided. Britain will be given free opportunity to state its case from time to time as the Canadian industries come before the board for investigation. It is noteworthy that meat is not mentioned by the Canadian authority, suggesting that this has been diverted to a purely Australian and New Zea-' land battle-ground. OTTAWA, August 13. (Received August 14, at 7.30 p.m.) The Anglo-Canadian delegations/again made further satisfactory progress. The committee on economic eo-operation unanimously approved of the report on industrial standardisation co-operution. The .next step regarding industrial standardisation mil be the establshment of a Liason Committee. Standards for steel and timber were chiefly discussed. There is no possibility of the conference recommending the immediate establishment of a permanent economic secretariat. It is more than likely that a special, sub-committee will meet after the Ottawa Conference to decide whether a permanent body is necessary to watcli the operation of the Ottawa preferences. This special committee will also consider the future of the Empire Marketing Board and endeavour to decide whether the existing imperial bodies should be abolished or amalgamated.

A VITAL COMMODITY DISCUSSIONS REGARDING MEAT PROPOSALS BY AUSTRALIA AND 8 ; NEW ZEALAND POSITION OF THE ARGENTINE. OTTAWA, August 13. (Received August 14, at 5.5 p.m.) Meat wars are raging, as the cables of the past few days have indicated, but Mr Bruce, for the first time, to-night admitted that the issue had been narrowed regarding this vital commodity. It is presumed therefore that there will not be any real difficulty with butter or fruit or any failure on the part of Australia and New Zealand to offer concessions necessary for agreement thereon. Signs earlier in the week were that Britain was becoming reconciled to the inevitability of a small quota. Now every aspect of the problem is being rediscusscd with new fervour, but unruffled friendliness. The offers of Australia and New Zealand are so framed that they would permit Britain to grant a quantitative restriction on Argentine’s chilled beef without laying herself open to the charge “It is av. unjustifiable starving of our market,” because the plan would not restrict Britain’s total meat imports. The plan which Australia and New Zealand are still pushing as a most vital factor in the Ottawa negotiations can be backed by many solid arguments, but the strongest is “ Unless we get something for our meat industry we might as well have not come to Ottawa. If we cannot have some protection wo simply will be unable to carry on.” Seeing that Britain’s foreign meat represents between 70 and 80 per cent, of her total imports, the dominions contend that it would be perfectly reasonable for Britain to decide to import a maximum of, say, 50 per cent, foreign and agree to take 50 per cent, from the dominions if they show they can supply it. Thus all the mysterious dangers boil down to this; Britain in 1930 imported 455,000 tons of Argentine chilled beef. Will she agree to accept in 1932 only 400,000 tons? This reduced figure is only supposititious, but Argentine’s 455,000 tons in 1930 represented 50.47 per cent, of Britain’s chilled beef imports. In addition, Britain in the same yea.r imported 00,000 tons of Argentne frozen beef, and 111,000 tons of mutton and lamb, making the total import percentages: From the Argentine (59.5; from New Zealand, 19.8(5; from Australia, approximately 8.97 per cent., and small amounts from other countries. In the final decision, which is expected within the next 48 hours, the 1931 glut figures will be made the basis of the restrictive plan which the dominions are still hopeful of achieving, despite the present formidable difficulties; if Argentine’s meat imported into Britain is quantitatively restricted by only 15 per cent., which may be near the mark the dominions are aiming at, it would represent a tremendous help to both Australia and New Zealand, which are resolutely emphasising that the proposal does not in any wise place a definite restriction on the total imports. Moreover, it leaves prices at the full mercy of market influences, , but these could be modified by duties, however small. It has been made plain that Britain throughout talks of duties alone. This is useless, because the Argentine could well afford to pay them and continue flooding the market by keeping the Empire frozen beef and lamb prices below a profitable level for producers. It is noteworthy that although scores of British and American industrial representatives have been swarming the Chateau Lauri.er lobbies, not a single meat man from the Argentine has made his appearance, at Ottawa at any stage of the proceedings. This might lead to the presumption that the Argentine knows well, the strength of its case, inasmuch as Britain has such huge investments in South America. The history of the conference will give the due perspective to this titanic struggle—business versus blood ties. Some consider it strange that it should be left until the closing days of Ottawa, but it might.be regarded by the British delegation as sound tactics, seeing the battle is practically over as far as other factors are concerned, giving the dominions grounds for satisfaction in the prospect of more reciprocal trade, coupled with the widespread belief that the innocuous currency report will gradually revive confidence and release funds for the stimulation of private enterprise, in turn diminishing unemployment. It can positively be stated that there were no harsh words in to-day’s marathon debate, but merely a serious and forceful recapitulation of the pros and cons behind the divergent views, but the divergency had apparently not narrowed at the adjournment. There were constant references to the meat statistics, including the latest unpublished Board of Trade returns, with graphs showing notably the Argentine high up among the nations imposing duties on British goods. It is even 1 hinted, but is npt mentioned between the contending delegates, that yesterday’s War Office contact, which was given to Australia, might be regarded as evidence that other factors than the quota can play a part in dissipating the depression in Australian and New Zealand meat industries. The fact that the British Ministers cancelled their intended participation in two week-end trips—the down the St. Lawrence to Montreal, and the second a visit to the power plants at Shawinigan Falls and the paper mills at Three Rivers—is clear proof of the importance they attached to to-day’s parley. Mr Coates is discreetly silent regarding meat, but authorised this brief communique: “The discussions on dairy products, meat, and fruit are well advanced.” Mr Coates and the other dominion Ministers are iii constant consultation with the British Ministers, and are hopeful that a most satisfactory arrangement will be made.

This message carefully covers the tightness of tlie ;j situation, in which Mr Coates has not relaxed, even momentarily, his efforts to put the New Zealand case successfully.