WARNING TO DOMINIONS

Otago Daily Times, Issue 23896, 25 August 1939, Page 7

WARNING TO DOMINIONS

TRADE WITH BRITAIN EFFECT OF CURTAILMENT “UNECONOMIC" INDUSTRIES (From Our Own Correspondent) LONDON. July 21. A warning to the dominions that any curtailment in their markets for United Kingdom exports would not only reduce Britain's capacity and willingness to go on buying from them, but would also impair the Mother Country’s strength at a time when it was vital for the Empire that that strength should be maintained was given by Mr R. S. Hudson, Secretary to the Department of Overseas Trade, when speaking at the banquet of the Federation of Chambers of Commerce of the British Empire. Mr Hudson also' said that there were indications that certain dominions might be led to foster industries for which they were not yet economically suited. It was to be hoped that they would weigh carefully all the considerations before committing themselves too far on that course. The Ottawa Agreements "I need not emphasise the importance of overseas trade to countries members of the British Commonwealth," he said, "Some years have elapsed since Ottawa. The agreements have been praised and criticised, it is certain that they materially contributed to a revival of intenmpenal trade. It is often alleged that they merely diverted trade between the Empire and foreign countries to interimperial channels. Ido not think this criticism is true. “As a result of the increased confidence inspired by the agreements, coupled with the reduction in trade barriers, the volulxie and value of inter* imperial trade have increased notably from the levels of the slump years. Secondly, the trade of foreign countries with the Empire also has risen materially above slump level. “Thirdly, if one looks at the cases where the dominions have a favourable balance of trade with the United Kingdom, one finds that, taking the picture as g whole, there has been a tendency for this favourable balance to increase, while the terms of trade with foreign countries have shown an opposite tendency. In other words, although thev bought more from the United Kingdom, they used some of their favourable balances with us to buy increasing quantities from foreign countries. This in itself serves to disprove the allegation that we have pursued a dog in the manger policy towards foreign countries. “ Fourthly, the failure of some foreign countries to recover from the slump as fast and far as t!be; British Empire did was due. not to the effect of the Ottawa agreements, but to increased attempts at self-sufficiency, to growing trade barriers, to currency restrictions, quotas, and so forth. “As far as the United Kingdom is concerned, we can truthfully claim that though we benefited from Ottawa we conferred even greater benefits on the other countries of the Commonwealth while at the same time doing our best to encourage trade with the rest of the world. “As far as we and the Empire are concerned, our strength depends on the maintenance and development of trade. In these uncertain times it is vital not to impair that strength. Much of the restrictions imposed on international trade to-day arise from the desire of countries to attain a position of independence from external sources of supply, with the idea that this will make them stronger and safer in fhe event of war. „ . "This ideal of self-sufficiency may, in fact, have precisely the opposite effect for, if pursued too far, an uneconomic industry is bound in the long run to impose a burden on the standard of living of the people and so weaken the financial and economical structure of the country concerned. For the Empire, or rather for the constituent parts of the Empire, it is a particularly dangerous policy to pursue. Dominions’ Industries

“It is not disputed that the dominions, like every other dependent country, are fully entitled to develop their resources to the maximum possible extent and in doing so to develop new industries. Ottawa recognised this in so far as the industries could be established on a sound economic basis. “ There are indications, however, that certain dominions may be led during the unusual position arislpg from the

present disturbed state o£ the world to foster, on defence and security grounds, industries for which they are not yet economically suited. It is to be hoped that they will not take the short view and that they will weigh carefully all the considerations before committing themselves too far on that course. “The defence needs of the Empire must be looked at from a wider aspect. At present we in the United Kingdom are having to face unprecedented expenditure on rearmament. Make no mistake; that rearmament is needed, not only for the defence of these islands, but also for the defence of the Empire. , __ , “Even a country with the United Kingdom’s vast resources is bound to feel the -strain of supporting • such enormous burdens as have been thrust upon us for purposes which are, I am sure you all agree, the common concern of the whole Com: .onwealth. “ One of the most important ways in which the dominions can assist in meeting this strain is to recognise the immense advantages which their trade enjoys in the United Kingdom and to ensure by all means in their power that they continue to make it possible for the United Kingdom to buy from them by themselves increasing—l say it advisedly because it is feasible —the amount of their purchases from the United Kingdom. „ .. . “It must, I think, be self-evident that any curtailment at the present time of dominion markets for United Kingdom exports will not only reduce the United Kingdom’s capacity and willingness to go on buying from them, but will also impair this country s economic strength at a .time when it is vital for the Empire that that strength should be maintained.” The Empire’s Foundations The Earl of Dudley, president of the federation, who presided, said that the miracle of the British Commonwealth of Nations was that there was no force and no central control, and that its Constitution rested firmly upon a foundation of freedom, goodwill and mutual trust.

There was no such thing as the London - Canberra - Ottawa - Capetown axis. There was no anti-Comm-tern or anti-Fascist or anti-anvthing pact between them.. It was a league of free nations, loyal to one Emperor, each minding his own business, understanding each other’s differences and problems, but with a common foreign policy a common armoury, mutually associated for the common wealth. The Commonwealth of Nations was, in its attitude to the rest of the world, free of selfishness and aggression. The wealth that it gathered from its farflung lands could be shared by the rest of the world as readily as the Empire shared it among itself. ' Its raw materials were denied to none, its avenues of trade were open to all.

Lord Runciman said that it was certain that the freedom and spirit of the British Empire would survive all vicissitudes. Its determination was no less now than it was 25 years ago, when it was faced with a similar crisis. The British Empire was the greatest instrument for peace ? the world had ever seen.. While it lasted one-quarter of mankind would be living together in peace. Mature But No Decays

It had become the fashion in some quarters to speak of Britain as though she was decadent. Britain was certainly mature, but there was no sign of decay. , , . ~ Everything in .their power should be done to maintain peace, but there was no doubt as to what was likely to be the attitude of the British people if things were pushed to an extremity. There had never been exponents of British policy who had more earned the regards of peacemakers than the Prime Minister and Lord Halifax,