THE HOME MARKET.

Star (Christchurch), Volume LXVI, Issue 20483, 8 December 1934, Page 13

THE HOME MARKET.

Misconceptions Cleared Up. GREAT BRITAIN’S POLICY. Misconceptions which have become general in certain quarters in New Zealand regarding the working of Great Britain's policy of regulation of primary products being imported into the Home market were refuted by Mr Malcolm MacDonald (Under-Secretary for the Dominions) in a striking speech when he was accorded a civic reception J to Christchurch this morning. Mr MacDonald explained that he had found, during talks with New Zealanders, that there was a common belief that it was the aim of the British Government to go in for large scale agricultural development, with the object of making the Homeland selfsuporting as far as foodstuffs were concerned. This was entirely wrong. The reason for the intended regulation was to raise price levels from the present depressed basis, and so make it possible for the British farmer to sell his goods at an economic price. Better Consumers. But it was not to be thought that the British farmer was the only primly producer who would benefit by this plan. Farmers throughout the world would find themselves with more money and so would become better consumers again. Fall in powers of consumption had been largely responsible for the depression and it would only lift when the farmer could buy again. This regulation would not be applied equally to the foreigner and Briton. The Dominions would receive exemption from the scheme until it was seen whether regulation of the imports of the foreigner was sufficient to restore price levels. Only when this was seen to be insufficient would the Dominions come under the scheme. Mr MacDonald began by saying that he had heard serious criticism of a certain item of British Government policy and he had decided to take this opportunity to say something about this item. It was only by the exchange of views that people here would understand what the British Government was driving at. There were three cardinal misconceptions. In the first place many people believed that Britain contemplated a policy of large scale agricultural development with the object of making herself self-supporting in food stuffs and less dependant on imports from overseas. This idea was entirely wrong. There was no idea of large scale agricultural development contemplated. Never would Great Britain be anything like free from imports of foodstuffs from her Dominions. The regulation of agriculture was planned, not with the object of large scale agricultural development, but principally to stop the shrinkage in agriculture which had taken place in Britain since the war. Scores of thousands of workers had been tlfrown out of work in the industry, and scores of thousands of acres had gone out of cultivation. It was planned to st.op this serious shrinkage by regulating certain classes of imports. By this means it was hoped to restore the industry in Britain to its old level and maintain it there. Uneconomic Prices. For years it had been necessary for the farmer to sell his goods at uneconomic prices. This had been caused by the huge surplus of primary products on the market. By regulating the supply so that it did not exceed the effective demand, it was hoped that the price level would be restored. But there would be no attempt to foster large scale agricultural development. Secondly, this move was not directed solely for the benefit of the British industry, but would help the industry in the Dominions as well. Foreign countries would also feel the benefit of regulation. Prices would be restored to an economic and profitable level. The Dominion, farmers had suffered by depressed price levels and, if this plan succeeded, then they would benefit with the rest of the world. The British Government had been analysing the causes of the depression and had decided that one of the main reasons had been depressed price levels. Farmers had not ben able to buy freely, but with more money they would be able to become purchasers of manufactured goods again. The main object was to restore the purchasing power of the primary producer. Restriction on Foreigners. In the third place it was often said by nationals of the Dominions that the principal was sound and worth trying but, if the Government was going to regulate and restrict imports, why not on the goods of the foreigners, anyway at first. This was the policy of the Government, and regulation would only be applied to the Dominions if it was found that the amount on the foreigner was not enough. The Government agreed that the Dominion contention was correct, and its policy was to put as much of the burden of regulation on the foreigner as possible, and leave the Dominions free. The foreigner would be forced to bear the brunt of the burden before the Dominions were asked to co-operate. This would only be done when it was seen that regulation on the foreigner had not, and could not, achieve the Government’s obiect of raising prices. Mr MacDonald then quoted the example of the Argentine. Meat imports from the Argentine had already been regulated. It was decided at Ottawa that the total imports would be restricted to the 1931-1932 level. This prevented any additional supplies being imported. further, imports of frozen meat had been cut down by 35 per cent and that country was now only sending 65 per cent of the old quantities. Next the British Government had conferred with the Argentine Government and carried this plan a stage further. Mr MacDonald said he had seen a report this morning that it had been agreed with the Argentine that restriction would apply equally to the Dominions. This was entirely wrong. It had been agreed that the frozen meat imports be cut down bv 35 per cent and now it had been agreed that the chilled meat supplies be cut by 10 per cent. Spirit of Ottawa. The spirit which had been agreed to at Ottawa was still the guiding point of British policy, but it would be readily seen that Britain could not totally restrict imports from such 'countries as the Argentine, and Denmark which were very good consumers of British manufactured goods. These

foreigners would, however, have to bear a heavier burden than the Dominions, and the British Government would stand by Ottawa. Summing up, Mr MacDonald said that there were three things to be remembered. Firstly that Britain did not contemplate large scale agricultural development and would always be largely dependant on the Dominions for foodstuffs. Secondly that the British plan was to restore price levels, as much for the Dominions as for anyone else, and lastly that the Dominions would always share in the British market. He had made this statement to show what the British Government really had in mind.