The Waikato Times. WEDNESDAY, FEBRUARY 22, 1933. THE ECONOMIC OUTLOOK.

Waikato Times, Volume 113, Issue 18877, 22 February 1933, Page 6

The Waikato Times. WEDNESDAY, FEBRUARY 22, 1933. THE ECONOMIC OUTLOOK.

It must have crossed the minds of many people that the hope of higher prices which has hitherto sustained them is not certain to be realised. It would be a distressing thought if it could be accepted, but there is no reason why any doubt should exist that the aim which is now universally desired can be obtained by concerted action. So far this concerted action has not existed, for the authorities in different countries have been pulling different ways. ..

At present the Americans are setting their hearts on the resumption of the gold standard in Britain, yet they ignore the condition which might make it possible, that is the reduction of tariffs to an extent which would permit of exports to the United States. In connection with this a meaningless formula has come into use. Canada has agreed to reduce duties sufficiently to allow British manufacturers to compete. It sounds all right, but in practice will be found worthless. ‘The reason for buying abroad is that some advantage in price or quality is obtained. If a duty is imposed to equalise this the local article is pretty certain to have the preference.

The United States when it comes to negotiations is likely to use this formula, but Britain will be very foolish to be taken in by it. It will find that in Canada it is but a disappointment. In Britain people are beginning to find that economic salvation is not to be had from protection, although the Tories are not ready to admit it, and want to blame Mr Ramsay MacDonald, whose chief fault would seem to be that he has done nothing to control Tory proclivities. It would be unfortunate if political uncertainties were added to economic troubles, but the incapacity of the Government to suggest anything beyond protection as a remedy. for unemployment is creating discontent, though there is no opposition to take advantage of it.

The various hindrances to international trade, of which tariffs are the greatest, are the chief drawbacks to any revival of business. Nationalism and war debts have both combined to intensify an evil which was sufficiently rife in the world before. Protection has been a craze for over fifty years, and during that period numberless industries have come into existence behind a protective tariff. Many of these could not continue on their own merits, and it is certain that they will strenuously oppose any attempt to close them down. Besides, the first effect of such action would be to increase the numbers of the unemployed who are already the greatest problem that faces all Governments. The ultimate effects would be to improve trade and provide work, but politicians fear to face the preliminary distress, and always take short views.

In New Zealand protection has not reached such lengths as in Australia and other countries, and we could withdraw from it without creating such an upheaval. It has been mentioned, a commission has been suggested, but the matter hangs fire, though there is nothing that would help the country so much. Incidentally it would help the Government, which is no doubt a consideration with them.

The farmers look for free trade within the Empire, which would be best of all. We suggested when the Ottawa Conference commenced to sit that duties within the Empire should not exceed 10 per cent. This would have provided a revenue for every Budget, and would have been a real encouragement to trade. It is to be feared that the conclusions which were arrived at will rather prove a hindrance, and Britain is busy explaining to Argentine that a meat quota will not actually hurt her, and to Denmark that a duty of 15s per cwt is of no importance. She probably finds them both hard of belief.

Britain lias thrown away the opportunity of advocating lower tariffs, and so far as Canada is concerned will find that she has sold her birthright for a mess of pottage. It is open to New Zealand to act up to the spirit of the agreement. If Britain has lost the opportunity of urging lower tariffs, it is unlikely that any other country will take up the role, and if the Conference breaks up without this reform it will ho acknowledged to have failed. Should that take place it would be necessary to undertake measures of economy very different from those hitherto carried out, for hopes of recovery would be postponed for many years to come.