IMPORTS INTO BRITAIN

Southland Times, Issue 22999, 19 September 1936, Page 14

IMPORTS INTO BRITAIN

Recent Marked Rise

NO CAUSE FOR ANXIETY Analyzing the recent substantial increase in imports into the United Kingdom, the Westminster Bank Review comments that the increase is a matter for congratulation rather than for apprehension. Two factors, it is stated, are predominantly responsible for the rise. The more important of these is the healthy state of domestic industry and anticipations by industrialists that it will continue, which account for the increased purchases of raw materials, and also of many articles classified as manufactures, including iron and steel products, machinery, and, to some extent, wood and timber -goods. Secondly, there is the improved purchasing power in Britain which has followed more active industry, and which has been the cause of increased imports of food, drink, and tobacco, and also probably of part of the larger imports of miscellaneous manufactures. The rise in imports" which may be directly attributed to more active trade actually represents about one-half of the total increase over the first five months of this year, and the increase in imports of food, drink, and tobacco more than one-quarter. Imports in these categories may fairly be regarded as non-competitive with British industry. The Midland Bank’s Review refers to Britain’s balance of payments and receipts and states that the excess of merchandise imports over exports and re-exports combined was larger in the past half-year than in any corresponding period since 1931. Concentrating attention on the returns for this year and last, the Board of Trade estimated that in 1935 as a whole receipts in respect of shipping services, the yield on capital abroad and other “invisible” items were sufficient to pay for the excess of merchandise imports and to leave nearly £40,000,000 available to add to the net accumulation of capital abroad or to use in the purchase of gold. The bank states that the present year’s recount will almost certainly show a small deficit. On a long view, if a large and growing deficit became apparent, it might provide good reason for serious disquietude, as in conditions like these a creditor country with a deficit on its balance of current payments is plainly and simply living on its capital. For the moment, however, anxieties of this order are unjustified. The balance of current payments, on the longer view, is still substantially even, and a small deficit for the time being can readily be covered without serious curtailment of receipts in future years from the remaining volume of capital abroad.