BARRIERS TO TRADE

Evening Post, Volume CXV, Issue 36, 13 February 1933, Page 3

BARRIERS TO TRADE

DISASTROUS RESULT

LEAGUE'S GLOOMY REPORT

(From "The Post's" Representative.) ' . LONDON, 6th January.

The continuous decline /of world trade during the past three years is emphasised in the "Beview" for 1931 and the first half of 1932, just issued by the Economic Section of the League of Nations.

The League experts make no attempt to conceal the seriousness of the situation.

"A continuous disorganisation of trade at the same rapid pace as in the last three years," says their "Review," "will very soon lead to a state when the national income of certain countries will no longer maintain the already low standard of living of their population." .' • •

_ Trade is being strangled by restrictive measures. It is being reduced to the barest minimum of exchange of indispensable products which cannot be produced in sufficient quantities by the purchasing country. ■ The decline in trade has been cumulative as well as alarmingly rapid. In 1930, its total value1 in terms of gold was 19 per cent, less than in 1929, followed in 1931 by another drop of 28 per cent, from the 1930 total, while in the first half of 1932 the total value was actually 34 per cent, lower than for the first six months of 1931. .

In two years (1931 compared with 1929) the, value of the world's trade has fallen by 42 per cent. Simultaneously, world prices have fallen, but more slowly. The situation is rendered the more serious because, in addition to the decline in value and prices, there has been a rapid shrinkage of the quantum of trade during the past three years. . ■ .

Prices have fallen by about 50 per cent, on the average, while the volume of trade dropped by 7 per cent, in 1930, 9 per cent, in 1931, and 11 per cent, to 12 per cent, in the firsfhalf of 1932.

The total volume of foodstuffs has slightly increased, but the . countries producing foodstuffs and raw materials have been particularly injured by the more severe decline in the prices of their ■ exports. The export trade of the United States has been hit more severely than that of the other principal trading countries. The reduction in the value of American trade amounts to 67.5 per cent, as compared with 60 per cent, for Germany, 57 per cent, for the United Kingdom, and 54 per cent, for Trance.

The .United Kingdom, states the "Review," suffered for a long time from the rigidity of her system of costs and prices, but her competitive power was improved late in 1931 by the currency depreciation. Germany, on the other hand, began to lose her competitive power in 1932.

The general effect Of trade barriers is, in the opinion of the experts, disastrous. "They have undermined established trade and production, aggravated the economic depression in many countries, and present a grave obstacle to the return .to more normal conditions."