ECONOMIC SANCTIONS

Waikato Times, Volume 119, Issue 19911, 13 June 1936, Page 6

ECONOMIC SANCTIONS

The Chancellor of the Exchequer at Home has frankly advocated the abandonment of the policy of economic sanctions imposed on Italy. Next week will see the completion of seven months during which Italy has been unable to trade with about fifty countries, and from which she could obtain neither goods nor financial assistance. Many leading men, including Viscount Cecil of Chelwood and Gen—eral Smuts, have advocated the retention of the sanctions and the issue is certain to cause widespread discussion. Naturally interest has turned to the economic effects of sanctions. The Fascist Government, seeing in what direction the League policy was tending, rushed in heavy supplies and in November Italian foreign trade was far above the normal level. Gradually the effects of the sanctions became noticeable. In December foreign trade had fallen to 79 per cent and by February to 55 per cent.

These figures are contained in an ofiicial return issued by the League of Nations, and the later particulars will probably prove the contention of General Smuts that sanctions are economically bleeding Italy white. Not being imposed by all nations the aggressor was able to-secure important supplies, but in January imports of wheat. were only 30 per cent of the normal quantity, coffee and rubber fell sharply and wool practically stopped. The vital supplies of oils were augmented by tar distillates and imports of coke and coal from Germany increased rapidly. Iron and steel imports were about 30 per cent of normal and cotton receded to about 60 per cent.

The provision of the necessary supplies is, of course, only one aspect. The Italians were cut off from markets for the disposal of their natural products and so could not build up credits to finance foreign purchases. That meant a. drain on the gold supplies and the reserves held, never very large, have been materially reduced Most of it went to France, and in one month amounted to £5,000,000. The interruption in the normal flow of international trade has been serious, and many of the neighbouring States, which usually have a. good market for their products in Italy have sustained severe losses. It may be this aspect that has induced Mr Chamberlain to urge the removal of sanctions. He will have strong support from Sir Samuel Hoare and other Ministers who have never liked the policy, but the uncertain factor is British public opinion. The opposition to any compromise, such as that contained in the HoareLaval plan, was strong enough to shake the Government, but adherence to the present policy will expose Great Britain to many serious risks. For that reason the policy to be advocated at Geneva next week is a matter of first importance. ,