YET UNREALISED

Evening Post, Volume CX, Issue 71, 20 September 1930, Page 15

YET UNREALISED

AUSTRALIA'S PLIGHT

FIFTY MILLION OVERDRAFT

ILLUSORY STANDARDS

Australians still did not realise their changed economic position, said Sir W. Lennon Raws, a member of tho Council of tho Australian Association of British Manufacturers in a speech to British members in London.

For sonic years, he said, it had been clear that Australia cou-ld not continue indefinitely to borrow abroad at the i-ate of about £30,000,000 per annum. ■ 'It needed no foresight to see that curtailment of overseas borrowings would cause a local depression and restrict imports. Since January, 102 D, Australia ihad: borrowed only £10,000,000 abroad, and the local depression caused thereby had been intensified by the world-wide 'depression, which has been reflected in the price of Australia's principal exports, Btates the Melbourne "Age." Comparing March, 1930, with March, 1929, wool fell from 20^(1 per lb to 12* d; wheat from 50s per quarter to 40s 0d; • /butter from.l66s per cwt to 1265. Prices • of all industrial metals had also drop- ' ped to unthought-of levels. ' He had noted with satisfaction the ; common-sense view, which had been adopted in England towards Australia's problem, but he doubted whether the severity of the problem was fully reali ised. Trade figures recently published showed that for tho ten months to April ■ last imports of merchandise decreased by £3,750,000, but exports decreased by : £42,750,000. Government commitments : abroad for interest, etc., were caleulat- : ed at £30,000,000 per annum. It had ? been estimated that Government over- . drafts in London at tho.present time ■ amounted to nearly £51,000,000. In the ten months to April last £26,000,000 . worth of gold was exported, almost entirely from reserve, as Australia's gold production was less than £2,1)00,000 per annum.' It was impossible to tell how soon: equilibrium would be reached. Obviously if and when further loans - were raised abroad they would have to : be devoted first to paying off over- ' drafts, and the accruing liabilities for \ interest would be a continuing check on ' imports. UNREALISED. Weather and prices were uncertain " factors, and Australian people had yet to realise-the imperative necessity of adjusting their standards to the new I. : conditions. There was no doubt of their ' willingness to do what was necessary, f if only the facts could be brought home :■ to them. Unfortunately, in Australia, v as elsewhere, finances and industry had got mixed irp with polities, and politi- *< cians had developed a constitutional • aversion from facing economic facts. In Australia they had deluded the . people into the belief that, irrespective ■ of production and prices, a standard of jiving could be established by legisla- ... tive action in the form of fixation of wages and conditions of labour, tariffs against imports, and bounties on ex- ' ports. The system had broken down, ' f but at the moment tho only remedy '■ offered was in the shape of "a hair of the dog that did the damage." There was another side to the picture. The" fundamental soundness of Ausf tralia's position had not been affected ; by the present crisis. Her overseas inf debtedness was amply covered by permanent works of a productive nature. ": There were large areas of good land ' opened up by irrigation schemes which ';.■ were still unoccupied. There were •' large tracts of country in regions of > regular and sufficient, rainfall which ■ • ■ were capable of intense cultivation. The . productivity of the agricultural and ■ pastoral lands was unaffected by the • crisis, the climate was the same, and, ■'. despite appearances to the contrary, • the Australian was a fine type—highly intelligent, with plenty of initiative and capable of hard work if he put his mind to it. Australia would emerge from this crisis all the stronger for the discipline she was experiencing, and with the, possibilities of future development and. prosperity unimpaired. . y FELT SEVERELY. Meantime it was unfortunate that the '• readjustment would be felt severely <■ by British exporters. With the exception of tin plates, Britain did not preponderate in those imports which were required to enable primary products to bo exported, or which might bo regarded - as conventional necessities. More- ' over, those articles which could ; be manufactured ■in Australia i economically were more com- ; petitive with tho United Kingdom than ■ with other countries. This aspect of j Australian trade has been dealt with by . Mr. Dalton, His Majesty's principal ■ trade commissioner in Australia. This question of competitive'industries, however, had a bearing on a question which . was receiving a good deal of attention in a section of the London Press under .. the title of Empire Free Trade. The . fact that this topic was debated at length by the Federation of Chambers of Commerce of the British Empire at its recent conference showed that it was more than merely a newspaper ''stunt,'' and therefore he would offer a fow comments. ' It seemed to him that there was a good deal of loose thinking and talking about this subject, and that few people were willing to take the trouble to 1 analyse figures to ascertain what was practicable, how much it would cost, and what it was worth. He did not overlook that this propaganda in favour ' of Empire free-trade might be largely intended for local consumption as part of a campaign for the protection of Britain's home market. There was considerable risk of misunderstanding, however, if they drag ged the Empire into domestic politics. If an Empire point of view wore taken he thought one was bound to concede < that as the population of a Dominion increased so must there be increasing , local manufacture,.particularly of those '• goods of which the Dominion possessed ample supplies of essential raw materials. Any other view was antagonistic • to the idea of Empire development as such. NOT AN EMPIRE VIEW. The idea that the Dominions were to be content with producing raw mater ials to be exchanged for manufactured goods from the United Kingdom was not an Empire view. What could reasonably bo urged was that Dominion manufacture should not run too far ahead of its appropriate development, that it should not go beyond the limits of economic production under a moder ate tariff, and that such tariff should have a British preference. Logically you could not push this far if manufae- , turers in the United Kingdom were noi prepared to protect their homo market. He found, however, that even where a British manufacturer was in favour of ' protecting his home market he had hostility only thinly disguised to the idea of a Dominion safeguarding its own home market. Personally, he attached far more im portance to those possibilities of in creasing BritishrDominion trade which lay outside the sphere of political action—to the strong voluntary preference towards British goods which existed in the Dominions, or, at any rate, in : Australia and New Zealand, to the strong desire in the minds of so many people to co-operate in maintaining and developing Empire trade to the opportunities which exist for British manufacturers to become identified with, and

take a lead in, that natural desire of a Dominion to develop its own manufacUA.lthough he disliked the word, there was a great opportunity for British manufacturers to rationalise their trade by becoming Empire manufacturers, instead of merely British manufacturers. The Dominions might appear at times to be selfish and indifferent to Britain s industrial difficulties. On the other hand, British manufacturers could not reasonably expect that the Dominions should remain static and eontinuo to offer a market which in many ways the British manufacturer neglected to cultivate. At the Empire Chambers _of Commerce conference criticism similar to that heard in Australia came from Canada and South Africa in regard to British salesmanship. The only reply to that criticism was made by a Birmingham delegate, who said such advice "was like teaching one's grandmother to suck eggs." There were some pertinent remarks on this subject in Mr. Dalton's report which lie ventured to endorse.