BRITISH TRADE

Wanganui Chronicle, Volume 80, Issue 122, 26 May 1938, Page 7

BRITISH TRADE

Economic Conditions in Past Year [ British Official Wirelc<*.| RUGBY, May 24. In the House of Commons the President of the Board of Trade, Pvt. Hon. Oliver Stanley, reviewed the economic conditions in the past, year, and made references to both the Anglo-Ameri-can trade negotiations and the position of the cotton industry. Fie said that 1937, apart from weakness towards the close of the year, had | been an extremely prosperous .12 months for British trade. There had been hardly a section of British industry which had not been able to increase its production and profits, and where wages had not tended to rise in the first four months of 1938. However, there had been a certain slackening in the increase of production, the main reason for which was the fall in commodity prices caused in the first place by the war in the Far East, which was having a much greater effect upon commodity prices and world trade than was fully realised. The second cause was the influence of the depression in the United States, where the loss of buying power had a most decisive effect upon covimodity prices. In 1937 the United States was buying from abroad commodities and raw material at the rate of 81,000.000 dollars a month, whereas in the first two months of this year the rate was only 49,000,000 dollars, Mr. Stanley stated that the difficulties of the cotton industry through the fall in prices had increased Ihe importance of the question of the reorganisation of industry. Adver: e Balance. Dealing with the question of the adverse balance of trade, the Minister said that the adverse balance last year amounted to £52,000.000, compared with £18,000,000, the year before The total of £52.000.000 was affected to some extent by the special transaction in silver amounting to about £11,000,000. but he thought that the adverse balance of £52,000,000 was not in itself frightening. It was true that the excess of imports of merchandise rose from £346.000,000 in 1936 tc £432,000.000 in 1937, but an analysis of the rise showed that it was not due to a decline in United Kingdom exports, which 'had increased by 9-5 per cent. It was due almost entirely because o’ the rise in the price of imported commodities. The figures for the first four of months of this year, added Mr. Stanley. were not so encouraging. Despite the beginning of the fall in commodity prices, the adverse balance had increased, partly because of the increase in imports, but even more because of the decrease l in exports. A striking fact was that the whole of the increased adverse balance of trade was covered by the increased adverse in the first four months of the year balance with one country—the United States. Such figures were disquieting, and would have to be taken into account in the negotiations proceeding with the United States.