The Waikato Times. With which is incorporated The Waikato Argue. WEDNESDAY, OCTOBER 26, 1932. IRON AND STEEL.

Waikato Times, Volume 112, Issue 18776, 26 October 1932, Page 6

The Waikato Times. With which is incorporated The Waikato Argue. WEDNESDAY, OCTOBER 26, 1932. IRON AND STEEL.

The announcement that Britain is about to impose a duty on imports of iron and steel is one that will be received with mixed feelings. On the one hand, British manufacturers have been suffering grievously from the competition of iron and steel sent to Britain by foreign producers and sold at less than cost. It is not wonderful that they call out for protection. Iron and steel, however, are the raw materials of an Immense number of smaller industries which have all benefited by the cheap Iron and steel they have been able to use. The number of those engaged In the smaller industries is greater than those engaged in the making of Iron and steel and the number is likely to be curtailed, to what extent cannot be said.

That competition is not the root cause of the depression In the British iron and steel Industries Is shown by the fact that the United States Steel Corporation which does not suffer from competition, has been operating for many months at from 13 per cent, to 15 per cent, of capacity. British manufacturers have suffered In common with all other manufacturers. Protected countries are no better placed than unprotected countries. Those with surplus gold are suffering in the same way as those who have abandoned the gold standard. Many people arc looking to some reform In currency and banking to afford a remedy, and there may certainly be room for improvement in these, but they could at the best afford but a partial remedy. In an American quarterly an illuminating article by Sir Arthur Salter appears. He has been for some years Economic Adviser to the League of Nations, and has had an unrivalled opportunity of observation. He sees the cause of our present distress in economic nationalism. It existed before the war, blit the Versailles Treaty constituted several now countries, all strongly impregnated with the virus of nationalism. The defeated countries hastened to borrow, mainly from America, In order to relieve their distressed condition and to interest other countries in their finances. The newly-founded States, with the exception of Czechoslovakia, borrowed in order to obtain a start In their new career. Neither those that lent nor those that borrowed bad had much experience, and the money was not spent wisely. When interest came to be paid it could not be done in goods. Some of these countries—-

in fact, all except Czechoslovakia —• were primary producers, and the United States did not want what they had to sell. Germany did, but as she was paying reparations she could not afford to buy. These Central and Eastern European States would not deal with each other, because some were victorious and some were defeated. The break-up of Austria has provided most of the opportunity for this economic nationalism.

Meantime Britain, which has been the great lender of funds abroad, is not receiving her interest, her shipping is but 'half 'employed, and the great financial Interests of exchange, Insurance and the arranging of world movements of goods have suffered grievously. Her payments to America meant a constant drain of gold. Her efforts to maintain the standard of life and cope with unemployment meant a staggering rate of taxation. It is hard to see how reforms in currency and banking are to effect a remedy for these conditions.

The first step is undoubtedly to facilitate the international exchange of goods, will oh at present is hampered even more by quotas and exchange restrictions than by tariffs. Sir Arthur Salter doubts if this can be done. The vested interests created by protection are too strong for Governments. Political impotence, the inability of Governments to govern he considers to be a danger even greater than the depression. The pressure of protected interests Is greater than legislatures are able to resist. Every country talks of a scientific tariff, but if there be such a thing it is beyond their reach. It Is obstructed bylobbying and log-rolling. We shall have an opportunity in the early future to see what can be done in this oountry to > resist these vested interests. No country has stronger reasons to be free trade. Geography and history point in this direction. Economic facts confirm it, and Mr Holland’s championship of protection does no service to the people he professes to help. Meantime the world over we are faced with the paradox of distress in the midst of plenty, and the anxiety which keeps statesmen awake is whether and for how long those in distress will refrain from destroying the foundations of society. There Is no good to be obtained by so doing, but hungry men do not take rational views.