The Waikato Times With which is incorporated The Waikato Argus. WEDNESDAY, AUGUST 27, 1919. THE ECONOMIC OUTLOOK

Waikato Times, Volume 91, Issue 14148, 27 August 1919, Page 4

The Waikato Times With which is incorporated The Waikato Argus. WEDNESDAY, AUGUST 27, 1919. THE ECONOMIC OUTLOOK

In the case of nations as in that of individuals, when the expenditure is in excess of the income, the inevitable end, be it staved off by ever so many ingenious devices, is, in the long run, bankruptcy and disaster. Artists and writers have, in the past,, devoted their talents to describing the road to. ruin in- darkest tints and the' most impressive language, but never,, with more telling effect than it is described in the important speech delivered by the Prime Minister in the House of Commons with reference to the economic outlook in Great Britain (says a contemporary.) Before the war the adverse balance of trade, represented by the excess of imports over exports, was £150,000,000. To-day that adverse balance has grown to £850,000,000. Associated with this serious Change is the momentous consideration that the United Kingdom has become a debtor nation instead of a creditor nation, and that the English sovereign has been so depreciated that it is not worth at the present time as much as 17s 6d in the United States. The "chasm" between the value of the imports and of the exports of Great Britain must be bridged, Mr Lloyd George declared in not too emphatic terms, "because at the bottom of it was ruin." Unfortunately since the cessation of hostilities the tendency at Home has been to widen. the chasm rather than bridge it. Moreover, as far as we are able to judge, the widening process is going on daily. The two main factors that are in operation to cause anxiety t'd' statesmen and economists are a lessened and lessening national production and an increased and increasing national expenditure. Mr Lloyd George puts the whole' case tersely when he says that the people of Great Britain are spending more and producing less. An unavoidable effect of the war has been the loss of a considerable proportion of Great Britain's international export trade. The energies of her people had been in large part exercised in the manufacture of munitions which were absolutely required for the successful prosecution of the war; and necessarily the industries of peace had to be more or less suspended, and they have not yet been more than partially resumed. Mr Lloyd George hints that an apprehensiveness with respect to the future has deterred manufacturers from launching out into a development of their businesses, but he suggests that they may safely do so "without the ice cracking under them." Certain it is that in order that the British nation may make both ends'meet, the international export trade which has been lost by the country must not only be recovered but largely increased, the more especially since the country is called upon to shoulder a large proportion of that huge and staggering sum —now definitely said to be £40,000,000,000*—which represents "the aggregate direct cost of the war to the world."

It is a most unfortunate fact, in the circumstances, that every branch of British production, with the exception of agriculture, shows "an almost sensational decrease of output." Mr Lloyd George did not hesitate to assert.— what, indeed, has become obvious, even at this end of the world—that this diminution of production is due to deliberate slackening of effort. He did not, it will be observed, exempt employers and managers from the.charge of "going slow.". .Upon the mischievousness of this practice he commented in terms which, even in the cabled summary, merit reproduction: "He stigmatised as a dangerous fallacy the theory that the less you worked the more work there was for everybody. Deliberately to reduce the output meant all-round unemployment on a gigantic scale. The absolute necessity for everybody pulling together must be brought home to the whole country, in order to enable the people to shake off the fatal lethargy and slackness which were depressing production and imperilling the most vital interests of the nation." It was impossible for the Prime Minister in this connection to overlook the recent developments in the coal-mining industry, which is one of the key industries of the United Kingdom. Before the war the annual production of coal in Great Britain was 287,000,000 tons. This year, despite the employment of a larger number of miners, the production is estimate at only 200,000,000 tons. The effect of this reduced output, combined with the payment of higher wages, is that lhe cost of raising a ton of coal, which was 10s in 1913, has been increased to 2(>s. Not only does this involve an increase in the cost of living in every home in the Mother Country, but it also imposes a handicap upon industry as a whole through the ehlVaiioement of the price of manufactured articles which have to be offered for sale in competition with the manufactures of other nations. It was, of course, impossible, as the Prime Minister admitted, that industry and production should all at once be restored to the pre-war standards. "It would take just as long," he said, "to adapt the machinery and the workshops of the country to peace tasks as it took to turn them to war purposes." It is to be hoped, therefore, that the balance of trade which at present bulks so largely to the disadvantage of Great Britain will be automatically redressed in greater or less measure as industries are developed under peace conditions. Mr Lloyd George indicated I hat certain palliatives would be applied, such as tin' employment of Board of Trade restrictions, for the prevention of "dump- I

ing" and the protection of unstable key industries, and the fostering of Imperial trade by means of better inter-Imperial communications. But when allowance lias been made for every mitigating circumstance and when all inducements to trade expansion have been put forward, the plain truth still remains that if Great Britain is to progress and prosper there must be a larger volume of production and a greatly diminished import trade. The exercise of rigid economy, in which those in high places may well set an example, represents the means that will contribute most largely to a reduction in the import trade. The matter of increased production is a much more complex question, which is engaging the serious consideration of the. deepest thinkers and wisest'statesmen. .It has to-be acknowledged t'hat the'former; influences which made, for hard and continuous work no longer obtain and that labour is at present disposed to exact other any mere peaceful inducements in order that increased production may be stimulated. To the consideration of this problem the minds of statesmen must be most earnestly directed.