THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. THURSDAY, 6th DECEMBER, 1934. THE RE-CREATION OF TRADE.

Waipa Post, Volume 49, Issue 3554, 6 December 1934, Page 4

THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. THURSDAY, 6th DECEMBER, 1934. THE RE-CREATION OF TRADE.

ACCORDING to me cnairman ox me uanK oi i\ew boutn Vv.aies, too muc« lenance nas oeen piaceu on tne Cheapening oi money rates in tne present-uay sc-nemes ior trade recovery', and not enough attention nas been paid to other and vital tactors. in so iar as tne criticism applies to a sectional policy, it may be justineu; jl-i-Vc there can still be grounds tor beuel that each pnase has its own importance and that the cheapening ol money rates is, in itself, one ox the correctives that are long overdue. We are told that “anyone who believes that abundant supplies of cheap money will by tneinselves place our economy upon an even keel is doomed to disappointment,” and tci illustrate the point banking returns at a recent period are quioted. True it is, no doubt, that credit facilities as expressed m money have provided an entirety new aspect to the national trade situation in the past year, and it may seem that expansion of trade has not re-acted to money rates as quickly as may have been hoped for. Yet, nevertheless, the cheapening of the rates must have served as a stimulus, and as the months proceed we may hope to see a widespread effect.

Traced to its origin, the economic trend must be in the direction of a lower overhead cost. This is reflected in no small degree by the annual costs of private and public indebtedness. The interest bill of this country must have loaded trade unduly when the high rates prevailed. It is not to Ibe expected that any over-night change would reveal itself when money rates were lowered. It necessarily takes time before the community can enjoy the advantage of lower costs allowing money to flow through the channels of a visible trade. There was no over-night reduction in taxation, for example, to turn money into trade channels. Months must elapse before the benefit of cheaper money can be fully revealed.

There is, however, considerable force of argument in the banker’s statement when he proceeds to analyse other factors, notably the weapons of political governments for international bartering*. Tariffs and quota restrictions are damaging instruments in world trade, and the banker is wise when he condemns the manner in which the freer interchange of commodities has been restricted and endangered to suit foolish policies of nationalism. The suoner it can be realised that the world cannot be divided into a series of watertight compartments the better it will he for everyone. The wisdom of this would at long last seem to gradually find recognition in America, where the lead in national independence and trade aloofness first took hold!. In a trade sense the Governments have blundered badly. Even in our faraway New Zealand the outlook has been insular and restrictive. There is really no place to-day for protective policies which, in the final analysis, serve only to defeat the veiy purposes for which they were designed. Actually, the doors should open more -widely not only for selling but and it is all-important for buying. Nothing could: so stimulate confidence as would an open-door policy, the throwing off of restrictions, and the opening of channels through which trade passes. But who is to set a worth-while lead ? Britain held to free trade until, shut off by protection in other lands, she herself was liable to become a mere dumping* ground. S°, also, must any country fare if a lead is set in ie--moving restrictions which were imposed merely as a part of a vicious circle to artificially control trade. Since the world is not yet ready for international agreement it would appear that only piecemeal reductions can bring us gradually nearer the day when the channels will restore themselves to accommodate the interchange of the world’s goods and services.