BAN AGAINST PROSPERITY

Taranaki Daily News, 27 May 1931, Page 5

BAN AGAINST PROSPERITY

PROHIBITION BY TARIFF NO OVER-PRODUCTION OF GOODS. ACTION OF CREDITOR COUNTRIES. (From Our Own Correspondent). Wellington, May 24. Mr. Arthur Henderson, the British Foreign Minister, who opened the session of the Committee on European Union, made some timely remarks on the barriers against trade, otherwise prohibitive tariffs, which he described as “barriers against prosperity.” International trade is largely a form of barter of goods against goods, in other words a nation must buy goods if it wishes to sell goods. The secret of economic life is in the production of goods and services for one another, and one of the most serious problems of economic life is to get goods and services produced in right proportions, so that they will clear the markets of one an; other.

Human wants are unlimited and insatiable. (Some authorities persist in the belief that there is over-production of goods, which is not correct. Wheat is supposed to be in excessive supply, but that is because of the obstruction to its distribution. There are many people in Europe eating black bread —that is, rye bread —who would gladly eat white if they could afford it. They cannot afford it because, their hands are*tied by lack of : market for the fine goods they turn out with their limited tools and machinery but with an abundance of skilled handwork. There is a glut of wheat in producing countries and a surplus of fine artistic manufactures in Europe, and if the tariffs were lowered these gluts would disappear. The principal creditor countries, that is, the United States and France, are the countries with prohibitive tariffs. These countries insist ,on the debts due to them being paid in gold, and the scramble for gold which this selfish policy involved caused the crash of community prices and embroiled tho creditors with the debtors. The United States has to-day the most gold of any country in the world, and it has the most unemployed of any country in tho world. There are men said to be walking about the streets of New York actually begging for food. Money is very plentiful in New York; short term loans can be arranged at 1 per cent, per annum, and yet there was a crash on the New York Stock. Exchange only the other day, and United States Steel stock, the favourite investment of Americans, dropped to the lowest level for years, lower even than in the great crisis of 1923. , International trade must take the form of barter, but the American idea of barter is one-sided, for they believe in selling goods, but hot buying. Fortified with this belief they have equipped their factories for mass production. In tfio matter of motor-ears the American can more than supply domestic demands, and to maintain that production they must develop export markets. Mr. Benjamin Anderson, the economist of the Chase National Bank of New York, touched on the raw spot recently when he (told his countrymen: “Wo are in the. midst’ of a severe business depression which is world-wide. The most serious- obstacle in the way of early recovery is the state of our foreign trade. The most serious obstacle in the way of tho revival of our foreign trade is our high protective tariffs. The quickest way to. get out of the depression is to reduce our tariffs so that our foreign customers may sell more goods here and get more dollars with which to pay interest on their debts to us and with which to buy our goods. If we do not buy we cannot sell, if we do not buy enough wo cannot sell enough.” That puts the position briefly but clearly. Some leading American business men. have been predicting that the depression would pass away during the next few months, blit there is little prospect of that while the / conditions that caused the slump still exist, for no attempt has been made to lower the tariff barriers. Many authorities, believe that trade revival must have its beginning in the United States, but if the Americans cling to their high protection tariff, the revival will be long delayed. It should be a. religious duty with Britishers not to buy American goods so long as the Americans pursue their selfish policy.