Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, FRIDAY, MARCH 11, 1921. REVIVAL OF TRADE.

Poverty Bay Herald, Volume XLVII, Issue 15467, 11 March 1921, Page 2

Poverty Bay Herald. PUBLISHED EVERY EVENING. GISBORNE, FRIDAY, MARCH 11, 1921. REVIVAL OF TRADE.

New Zealand has a vital interest in J the efforts which are being made at the ! present time to restore British trade. • There is n, direct relationship between j the price of wool and mutton and the • ability of New Zealand industries to maintain their prosperity with the value of the-franc or the kroner and the ! ability of the populations of European i Slates . to purchase British manufactures. British trade has been escribed as a cycle based on the exchange,of coal, coal-made goods, and shipping and financial services, for oversea products which Britain largely" or entirely lacks. i The small islands of the United Kingfdom, rich only in coal, deal in and profit ! largely by all the world's work and. i wealth. In so far as the war has made Britain's neighbors and customers poorer ■ it lias made her poorer. The extent to which she. is dependent on her exports may" be gathered from a calculation j that, the internal trade of the British j isles would not support the. population for more than four months of the : twelve of any year. 80 that when the [ channels of oversea commerce become j blocked every person and every interest ; feels the effect. Before the war Britain I did 30 or 40 per ccujt of her overseas i trade with the Continent of Europe. Is ; it. surprising that with this lucrative j custom almost entirely cut off she should j bo feeling intense depression? In 1913 ! her entire oversea trade figured up to ; 147 million tons of commodities. That figure had fallen in 1919 to 84| millions, I and last year it stood at 87 million tons. 1 Iron and steel exports fell fi'om five to three and one-third. million tons, ! machinery exports from 746,000 to j42,CCO tons) hardware, from, one million' j to 300,000 tons, coal exports from 73 j to 25 million-tons. Need[ess"tp say the i best minds in Britain have been * busy i day and night endeavoring to devise . means for overcoming this slump in . commerce. Mr Balfour, in a, recent -speech in the House of Commons, briefly defined-.the situation. One 01 the great - problems under which the economic world was now groaning was that those who produced could not sell, and those who wanted to buy could not buy. The difficulty was the problem of arranging adequate credits. Tho' proposal laid before the League of Nations' financial conference at Brussels, and adopted by the Council of- the League, was a scheme, due to the. inventive sagacity of an eminent Amsterdam banker, M. ter Me.ulen, to make it possible for any country which required imports for the essential needs of life, not luxuries, to see whether in, some shape or another, in the shape of its national lands o v particular sources of revenue, it had assets on' which borrowing, might legitimately take place. If it had, the League proposed to find the machinery for valuing these assets and the borrowing country could issue, bonds upon tin assets in payment for goods imported. Everything turned upon whether the exporting country would accept those bonds. Mr Balfour added that the Government, were > seriously considering whether, as far as this country was concerned, the scheme of these bondmurht not be supplemented by some form of insurance which would make their currency' and utility for the pur pose for which they were called info existence more certain. In view of the economic problems of the -world, they wore right in trying this experiment, and if it provpd' successful it would

benefit mankind. It would Seem..- from■.• -■■ Sir. Robert Home's statement appear- ' ing in our cable news to-day that;conferences with iitaurnnce companies"' and '«'•>■■ bankers, have revealed difficulties WM6h * prevent- the speedy carrying into effect '■" of - the ter Meulen scheme and .the";.' British Government, realising ' .'the.'-';'• urgency of the situation, has -developed -■■ its own scheme. This provides that the ''/,] Government shall guarantee up ; to-So per ; " .'-. cent of the price of; goods 'bought" io ■ ' ' t lie, buyer, who will be required to pay. • at least,so per cent,' the'.Government inking half ilia uncovered, risk. Ex- '■• porters will be enabled to, arrange with the banks in the ordinary way. Another proposal, made by Sir Edward Moun-"' tain, a well known Snsurance expert, was that the Government- Should"appropriate £I7>OO»,CCQ ot tho £26,000.000 set aside tinder the exports '■ credit, scheme, for the purpose, of -providing a guarantee fund. Syndicates- would be formed in Britain which would rat-, once proceed to get those countries where credit is had, and which are desirous of buying our goods, to form a, "syndicate ' of their leading bankers,' who would -'-•■ guarantee the hills'%o their own markets. This proposal- the (government rejected, hut. discussions continued .with -'tho bankers and insurance men,: all being thoroughly favorable to ..the .main idea. "Authoritative financial . oj iniony''' said the Times of recentjissfksj "is running more, and more in. favor of <-the i-v't'er Meulen Credit Scheme; or ' something - like it, for it is realised that Europe's chief trouble is unsound .currency,.th»outcome of the continuous!i". use of the • printing press. The ter.Meulen scheme provides for the use of what are called gold bonds, secured on, the'product;. of ' assigned assets in the borrowing; country. These bonds would be used"'as collateral for importer's bills, but thoughfairly stringent, conditions. are providedto limit their issue, he definite control of internal finance is given to the. International Commission-to be set up'under the scheme. If the-ter Meulen project Could be strengthened so that it provided for some increase, of financial'*refdrni,in the importing country,-in wderlh&Vthe' use of the printing press might'hejre-. strictcd and gradually abolished, then , the banking community, would -he able - quickly to evolve a satisfactory, scheme of control." Another project waS/toform _ a. great Traders' Association-- for Britain. The agents ofi this association, ( it was stated,- would 'relieve our traders' of their difficulties with,the exchange's, for it would accept payment, in -'products; it would transport these;-prb-S ducts witli comparative- 'ease Serosa', i frontiers which,-,present hopeless obstacles t'o the native trader, and dispose 'jol •them in another : second country |also they would ; . have > Kens on articles, or other-.. ;. wise, which in their turn•; would, he . transported to a third country, and', so ; ' on. The proposal is said- to -have received tho'"sympathetic consideration of . bankers. . Yet another, remedy... that is ' mooted is a direct scheme barter. Sir Charles Sykes", the member for Hiiddersfield, a man of practical business ability, lately visited Denmark and tha Baltic and evolved plans for promoting * trade by barter, whichhaye been reccivf t ing a good deal of attention arid'may yet materialise. In." fact Jt is rejpbrted [. bj the Daily Chronicle' that an 1 arrangement has been come to between representatives of the Woollen Merchants' " Federation (cloth .merchants)'''•■. and sis 7- cloth manufacturers' associations-, in '"' England and Scotland, to start such' an enterprise. The object of the proposed - corporation is primarily to act as-a clear- , ,ing house, through which, will'be regis- . i tered stocks of clothheld, by its memj bers. . Negotiations will then be started r j with foreign Governments;' corporations, ' and traders;, with a view of'exchanging - t|je stocks;"of cloth, which lated in England, for iuw materials .arid y food, which can. be exported from \tJhie .-'"' ! Continent, more 'particularly- frcMtt'those ■ countries covered by the Government ex- : port credits scheme.' It ; is-riot the inI ten lion to use the corporation to do '• business which can bo done, by-private I /irms; its wholo.aiih is to transact-busi-,ness which. individual firms find 1 it,Miffl- ,| cult to accomplidu "It \vill endeavor to ,- discover new markets ', and methods' "< whereby 'British 'goods, .Which, are chbk- ' i' ing our trade, may reachithpse countries.'' f in Europe in need of them,hut Unable 1;: \ to.buy for rash. The : 6bjec;t;of :tba cor- —' . joratiou is not to make a. profit, .but • . to realise stocks and get- rid of 'congestion. When once the block of, manufac- . j fured woollen goods can be' broken down* ', the wheels ef industry will, revolve and • employment will increase,, "Few people,''' adds the Chronicle,' "'realise Jthat we are within measurable distance of .the clos- ' ing down of* the whole, of the -textile trade. It is understood that the Govi eminent is in close touch with developi inents, and will be prepared to co-oper-ate in a manner which it'would find -dim-' cult to do in the case of individual firms. ' . Trade by barter is an intricate business, ' e requiring many links and wide experi- . once. Credits are also essential, and i public opinion, which is now thorough- • a ly aroused on the , quesJ tion, will endorse a-farrsighted* and bold -■ policy by th» Government in this re- - spe:t. With the new. development the } Government can now be: more elastic in i the credit facilities which - it'gives..' That . the woollen trade, which is, probably, I the most individualistic trade-in tlie country, should come together in this ' * way for the common good of its .mem-' bers, shows- the importance attached t& > the question by hard-headed Yorkshire--' . men and Scotsmen;'!. ..It will bo seen' '" . from tho above thai. Btrong, .practical . efforts are being .made to revive trade , between Britain and the GJontinehJ;, arid . one or other, of- these may 'ho expected ■'" 'to bear fruition any *day. Tlie one' ' • thing needful is to get thb machinery 6i ■'■ > once more in working order, . to free the channels .of,'trade so ihat ( present and future stocks .may get but into the wor]'d>and:the.wh.eels-of;produo--1 tion may once > again revolve smoothly i and continuously.. '-• v >• !