BRITAIN THE MAINSTAY

Dominion, Volume 10, Issue 2920, 4 November 1916, Page 10

BRITAIN THE MAINSTAY

AMERICAN JFRmUTE (The "Now York Times. I '),Jj; War's business is wasteful, eco« nomically unprofitable, symmetrical and pricc-inllated, and yet so impressive a spectaclo in human endeavour that its value to the future will be enormous. Unsuspected possibilities are revealed. At the beginning there was a saying in England: "Business as usual." It needs now to bo amended. It should bo "Business much more than usual." Old measures are forgotten. New magnitudes appear. According to the Board of Trade figures, Great Britain's imports in the nionth of May were £83,800,000, an increase of £12,200,000 over thoso for May, 1915; in tho same month her exports and re-exports combined wera £60,500,000, an increase of £14,157,000 over thoso for May, 1915. Imports wore larger than in any preceding month in tho history of British trade, with the ono exception of March, as would be expected, with the outlay upon war increasing steadily. But it is'surprising io find that exports not only have been rising faster than imports, so that tho adverse balance tends to diminish, but that exports actually have grown to new proportions. Thus, exports in May, 1916, were 39.87 per cent, greater than. in. May, 1915, and 11.8 per cent, higher I than in May, 1914, before tho war. Re-exports have increased in the same way. They were 7.39 per cent, creater last May than in May, 1915. and 6 per cent, greater than in May, 1914. Theso figures do not contain ono verv important commodity, namely, British' credit, of which the exportation has enormously risen.

Great Britain is the economic mainstay of the Allied cause. She holds the purse, and with it the power to command the world's goods, especially food.- By reason of her natural wealth • in material and her great industrial equipment she is able, besides, to produce for the uses of war a surplus of manufactures above her own requirements. Her exports and. re-exports, therefore, include both goods produced out of her own resources and supplied directly to h"r allies and other poods bourrlit_ outside in the markets of the world for their account. France is a ' very largo customer for Britain's coal and iron, her own sources of such raw material having been conquered by the enemy. The other Allies, being in-dustrially-inferior to France, require from England enormous quantities of manufactured things. The aggregate of Great Britain's trade with her Allies may be measured by the entry of "advances" in. the balance-sheot of war expenditures. .This item represents not money loaned to her Allies, but almost entirely goods supplied to them on credit. At- the end of March last it amounted to £368,000,000. In the fiscal year it would be increased by £430,000,000, according to Chancellor % M'Kenna's estimate. Thus, on March 31, 1917, if the war lasts till then, Great Britain's Allies will owe her more than £800,000,000 for goods obtained on credit, and that will be roughly ono quarter of Great Britain's aggregate expenditure for war. She is merchant, producer, and hanker. By March 31, 1917, she will have invested in the war, out of the proeeds of taxation and loans, domestic and foreign, the incredible ,sum of £3,300,000,000, of which h'er share will bo roughly £2,500,000,000. The balance will be represented by "advances to her Allies," which thoy will he obliged to repay. At the close of the war, therefore, England will be what she was before—the largest creditor nation in . the world. She. is in the position of a banker who takes his credit from one place and puts it in another. She is liquidating lier crcdit in this country by sales of American securities and lending the proceeds to her Allies—to France, Russia.. Italy, and her own colonics. The liouidatiou of her investments herp. plus her borrowing, is, approximately, off-set by the debts her Allies are contracting with her for war supplies. And. at the same time, trade with non-belligerents is resuming. .That is very intorestinc. In M,ny. British, exports to China and South \niorica notablv increased. The revival of orders from South America for fabrics was for British industry, a pnrticu-

Inrly gratifying development. Harms increased her exports of nearly everything but ships, at the same time

chocking in every possible manner unnecessary imports, by prohibitions, du-

ties, ctc., the adverse trade balance is being steadily diminished. In the first five months of 1915,■ it was £160.000.000: in the first five months of 15116 it was £147,600.000. Bouahlv, at the present time. Great Britain's excess imports over exnorts is balnncd by nclvjiiices to her Allies, so that she is keeping even, or perhatis a little lietfer. This is the extraordinary proof of her capacity for business.