The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. THURSDAY, MAY 11, 1933. ECONOMIC WARFARE

Southland Times, Issue 22012, 11 May 1933, Page 6

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. THURSDAY, MAY 11, 1933. ECONOMIC WARFARE

Clearly the basic idea of the quota is the raising of prices, and if this is achieved in advance of the capacity of the market the result will be a shift to other foodstuffs. Cheshire farmers have found the cheese prices too low for profitable production and they have been withdrawing cheese from sales, blaming the low prices at which New Zealand cheese is selling for the depressed condition of the market. They are asking for restrictions, but if the price is raised as a result of the curtailment of supplies and the consumer cannot support the level, the effect will be a reduction in consumption and a further fall in prices. All the proposals for raising prices must be regarded with suspicion if they do not take into account the purchasing capacity of the Old Country. There are alternatives in every food trade and consumers will take advantage of these alternatives if they find prices too high. Already the increased consumption of bacon has been noted, with a depressing influence on the market for lamb, mutton and beef. This cannot be checked by quota. In fact, if restrictions are too severe they will accentuate the difficulties by driving more people to eat the cheaper meats. Much is said about the ordering of marketing and supply, but control is dangerous. Producers who give fair attention to the load of taxation in the Old Country and the striking effects revealed in the returns from income taxes must realize that the glut in the British market is not wholly due to increase in supplies. Certainly the stocks in the Old Country are larger than usual, but in great part this has resulted from the incapacity of the people of the Old Country to buy, so that there can be no real recovery unless the consumer’s purchasing power is strengthened, because the diminution of supplies will not enable him to pay more. If a man cannot buy because he lacks funds, raising the prices will not help him or induce him to buy. That is why the producer in this country must be prepared to assist any effort to increase the volume of Britain’s trade, and every effort to enlarge Britain’s income from her services. That, too, is the reason why' the World Economic Conference is of direct importance to the producer. If the Conference, by removing barriers against the flow of trade, helps British industry to revive, it will help to raise the price levels for the Dominion’s produce, and if the burden of the War Debts is lightened the relief will be reflected in better prices. To-day nations are talking about the need for the removal of all barriers against trade, and yet all'of them are persisting with tariffs and artificial restrictions which have similar effects. Losses sustained by the great British shipping services serve to curtail the capacity of the British people to buy, and so the producer who assists Britain’s shipping rivals, some of them enjoying rich subsidies, is really cutting his own throat. The prospect of an economic war is not pleasant; but a look around the world to-day with tariffs, subsidies, artificially raised exchanges, embargos and restrictions will make anyone wonder whether it would not be proper to say that actually an economic war is now in progress. The World Economic Conference, if it replaces these conditions of antagonism with genuine co-operation, will do most to prevent an economic war. It will have a heavy task in cutting through the tangle of restrictive measures, but the delegates will know that the work they are doing is of far greater importance to the world at the moment than discussions about reductions in certain classes of war material. While the condition of economic antagonism continues, the danger of military warfare persists, and while that danger remains, t nations will decline to reduce the armaments they consider necessary to their, safety. As the economic basis of international warfare is recognized, there should be no two opinions about the urgent necessity for the restoration of economic co-operation.