INTERNATIONAL TRADE

Otago Daily Times, Issue 23499, 13 May 1938, Page 12

INTERNATIONAL TRADE

CONFIDENCE WEAKENED (From Our Own Correspondent) (By Air Mail) LONDON, Apl. 23. Confidence in international trade, which could otherwise be fully justified on economic grounds, had .been weakened by the situation in Europe and the Far East, said Lord McGowan, at the annual general meeting of Imperial Chemical Industries in London. As a result, the expectation of a period of steadily increasing prosperity might be deferred. Before hostilities broke out in the Far East, the Central Chinese Government was causing a widespread increase in activity and a growing demand for imported products. “I am not prepared,” said Lord McGowan, “ to forecast the outcome of the present situation,- but there must come a time when the commercial development of China will be resumed, and I cannot believe that any one nation will be able to reserve for itself all the advantages of the future.” Japan was facing a great emergency, with the result that ordinary commercial activities were more or less suspended. But the diversion of Japanese factories from industrial to war purposes had diminished supplies available for export, so that Japanese competition throughout the world had, in most of their products, fallen to negligible proportions. Exchange regulations still tended to form a brake in the progress of trade. The reception given t 6 the van Zeeland Report showed a large body of influential opposition anxious to find means of freeing world trade from this particular form of obstruction. Reviewing the prospects for 1938, Lord McGowan said no one had fathomed the mystery of the waves of industrial and commercial activity called trade cycles, but if it were true that a cyclical movement extending roughly over nine years were to be expected, the general outlook for the next two or three years would not be prepossessing. Much of the future depended on the United States. He remained a firm believer in the resilience of the American economy and its latent power of recovery. When an upward movement did occur, it would no doubt' be reflected in world and therefore British trade. Lord McGowan, discussing the progress of the petrol plant at Billingham, said that the general question of the production of oil from coal was considered last year by the sub-committee appointed by the Minister for the Co-ordination of Defence. The sub-committee was driven to the conclusion that as a means of providing a large measure of employment the hydrogenation and synthetic processes did not at present offer hopeful prospects in comparison with the cost involved, but as a matter of technical and industrial development the country should be able to have first-hand experience of the working of these new processes. It had recommended the continuance of the present preference of 8d a gallon for 12 years from 1938. He hoped the Government would take an early opportunity of passing legislation to implement the committee’s recommendation.

Lord McGowan also said that much misapprehension still existed with regard to the dependence of the profits of the company upon armament orders at home and abroad. Only a very small percentage of their activities was concerned with such business.