THE POST-WAR YEARS

Otago Daily Times, Issue 24945, 18 June 1942, Page 3

THE POST-WAR YEARS

ECONOMIC PROBLEMS ADJUSTMENT OF TRADE (N.Z.P.A. Special Correspondent) LONDON, June 16. Trade in post-war years is the subject of growing comment, and the views of Mr C. J. Hitch in Oxford economic papers concerning post-war controls are receiving attention. He lays down two principles—first, Britain's economic future depends on the extent to which she combats self-in-terested restrictionism—representatives of the trade concerned are not the obvious commanders of the campaign; secondly, the freest possible multilateral trade should be clearly formulated as the aim of British commercial policy. Mr Hitch realises that control will be necessary during the post-war transi-' tion period in view of the pent-up demand, and arrears of work on the one hand, while on the other hand the relative scarcity of materials and shipping facilities necessitate some system of priority allocation. Mr Hitch wants to spread this accumulated investment demand over a period by controlling the rate and direction of use of investment materials, as steel and timber, by continuing the licensing of civic building.

Regarding Britain's foreign economic relations, there will be pressure of circumstances calling for control. Britain's ability to buy abroad will be 80 per cent, or less of pre-war ability, while the demand for imports will be greater in order to carry out reconstuction, secure full employment, and satisfy the pent-up demand. The supply of sterling is likely to be 50 per cent, more than the demand for sterling. Accumulated sterling balances on overseas accounts will be large by the end of the war. Capital exports will make the position worse, and speculative capital movements will be dangerous. Mr Hitch believes that controls and restrictions are undesirable, but that they will be necessary in part and for a time. He rejects depreciation, bilateralism, and borrowing, but reluctantly supports non-discriminating restrictions on unnecessary imports and capital exports. He proposes exchange control of import licensing and bulk buying of necessities on Government account, his argument being that import restrictions must be combined with measures to increase exports to a point to which these restrictions will be rendered unnecessary. The Manchester Guardian, commenting on the speeches of President Roosevelt, Mr Cordell Hull, Mr J. G. Winant, and other Americans, observes that the kind of policy for world trade they advocate will at first meet great difficulties. "The greatest of these," it states, "will be to persuade American opinion that the United States must take the lead in reducing barriers of trade and credit. By using its, vast gold treasure for financing financial projects of development the United States could contribute more than any other country towards general recovery without having the fear of domestic dislocation."