UNFORCED TRADE

Evening Post, Volume CXII, Issue 59, 7 September 1926, Page 30

UNFORCED TRADE

REAL PREFERENCE

BUYING AND SELLING

WHAT STATISTICS EEVEAL,

With so many complex problems of Empire still awaiting the full investigation and discussion which must precede solution, it is, refreshing to turn to a field in which controversy once raged and has now been stilled (writes Harold Stannard in '^The Outlook"). A reference to the fiscal question may perhaps stir the pulse of some as yet only semi-petrified Liberal; but the rest of us have found a way of compromise. After twenty years' discuscussion the economic argument for free trade remains unimpugned, but beside it has been set an equally irrefragable political argument in justification of the British Empire. The two must somehow be reconciled and since, in the modern world, trade relations tend to promote political ties, it is agreed that the States of the Empire should be induced to trade together as much as possible. To force trade would cause economic dislocation fatal to the political object, and the fiscal arrangements of the Empire have now been shaped in a common-sense fashion, with an eye to their practical effect.

GETTING TOGETHER.

Such is the theory of our present fiscal system. It remains to see how it is working. Trade is conducted in the last resort by individuals, and for this reason we give figures of purchases and sales per head of the population, as being the nearest statistical approximation to the business actually transacted. In estimating the significance of these figjires it must be borne in mind, on the one hand, that there has been a rise in general prices since 1913, and, on the other, that the whole world has been impoverished by the war. The first circumstance tends, of course, to make the trade appear larger than it really is; the second to create a real diminution when allowance has been made for the difference in price level. By way of standard let us take British trade with two highly-developed communities —Germany and the United States. In 1924 the average American sold approximately £2 worth of goods to Britain and bought approximately 10s worth from Britain. Similarly the average' German sold 15s worth and bought 14s worth. A comparison of the size of these figures with the Dominion statistics to which we now paßs is most striking evidence of the potency of preference. •

NEW ZEALAND'S POSITION.

New Zealand is the Dominion which feels herself nearest Britain in sentiment and which therefore turns preference to the utmost account. In 1913 her exports to Britain were worth £15 15s 9d, and in 1924 £'30 9s 4d. Her main products are foodstuffs in regard to which the diminished demand is least felt. On the other hand, New Zealand has had to withstand intense competition from the Argentine. Nevertheless, the figures show that the trade has increased by more than the rise in prices. New Zealand's imports from Britain, on the other hand, are mainly manufactured goods and here the consequences of the war are clearly exh- ited. The figures are: 1913, £11 12s lid; 1924, £17 Bs. Here the rise in prices conceals a slight real drop—insignificant, however, when compared with the diminished demand of the world in general.

DEVELOPING HOME MANUFACTURE.

The Canadian figures offer an interesting contrast with those for New Zealand. So far as exports are concerned the two Dominions are parallel. Canada sent us £4 14s 5d worth of goods—also largely foodstuffs—in 1913 and £8 12s 6d worth in 1923. But the difference in the import figures is very marked. The average Canadian spent £3 17a in the Home Country in 1913 and only £3 4s 2d in 1923. To some extent this drop reflects the successful American invasion of the Canadian market begun during the war and prosecuted since. The main explanation, however, is that Canada has gone ahead with the development of her own manufactures, and she therefore buys less from all foreign countries including Britain, and that preference has very rightly been subordinated to national economic needs. The figures for Australia are:—

It will be observed that the relation between exports and imports has been maintained, a satisfactory feature from the point .of view of the 3teady development of trade, but that the real totals have diminished. Probably the somewhat over rapid urban development of Australia has limited the supplies available for export, while the growth of domestic manufacture has similarly checked imports.

A HELPFUL SYBTEM.

Turning to the figures for the European population of South1 Africa we observe how enormously the trade of a new community just beginning its national life is affected by the special accessibility of any one market. The average South African of European descent shipped £44 Is 8d worth of goods to Britain in 1913, and £39 7s 5d worth in 1623. The drop need cause no alarm. Obviously the earlier figure could not be maintained, but was bound to decline in proportion as South African products became familiar in the world's markets. The import figf ures do not show a wholly similar movement, the pre-eminence of Britain in the manufacture of the heavy machinery which the Band requires having prevented a parallel distribution of orders. The average South African spent £18 8s lid in Britain in 1913 and £20 9s 2d in 1923. It is plain, then, that preference is completely justified. It has maintained a volume of trade adequate to the political bond between the States of the Empire. In this respect the comparison with the United States and Germany is singularly instructive. On the other hand, as the case of Canada most clearly demonstrates, it has never hampered economic development. It is, in fact, a most helpful, most unobtrusive element in the Imperial scheme of things. Long may it so continue.

1913. 1922-23. i-2 S £ s. (I. £ s. d. Exports per head to Britain 7 12 10 9 11 a Imports per head from Britain 9 15 8 12 3 11