ECONOMIC OUTLOOK

Hokitika Guardian, 28 June 1930, Page 6

ECONOMIC OUTLOOK

BRITAIN’S' TRADE PROBLEMS AN EXPERT’S SURVEY.

At the annual meeting of the London Chamber of Commerce, Lord Herbert Scott, the* president, in moving the adoption of the annual report, said the problem facing industry was an excess of supply over demand; it was a world phenomenon. It had been described as over-production, but lie preferred to call it under-consump-tion. It was noticeable not only in the case of manufactured goods, but also in the case of primary products. Unabsiorbed stocks of tin, cupper, wood, wheat, rufiber, oil, coffee, sugar. and tea bung over the market and tended to depress prices to uniemimerative levels. In this connection he was Ixnmd to point out that re-, tail prices had not fallen in relation to the pre-war index figure to the same extent as wholesale prices. Taking 100 as the pre-war index figure, wholesales prices were 124.5 and retail 157. There was no justification for this difference, and the unduly high retail prices checked consumption.

Excessive tariffs were, however, one of- the principal causes of the econo--mio sickness from which -the world was suffering. Behind these tariff barriers industries had been built up which could never hope to have survived under conditions <if free and open competition. The ratio of wages paid by those industries- to the cost, of their product was far lower than in the countries which had natural advantages lor economic production. In this way. while the world's productive capacity had been increased by the addition of many uneconomic units, the purchasing power of masses of potential' consumers had been reduced. If at the same time they considered that the natural producers had been artificially deprived of many of their markets and so had had thencosts of production forced up through being unable to .work to full capacity, the causes of the malady of underconsumption from which the world was suffering stood out- clearly.

So far as this country was concerned. wc appeared to have got out heads firmly buried in the sand, and refused either to see or to hear disagreeable facts. He proposed to point out one or two unpalatable facts. The surplus of ibirths over deaths amounted annually to about 250,000; the number who emigrated amounted to about 150,000. We had, therefore, to reckon with an annual increase of population of 100,000. We were, at the present moment, employing more people, including women, than in 1914. and 3 7 et we had an unemployed population of 1,660,300 persons. He did not see, under present conditions, anv likelihood of this country being able to extend its trade to such an extent that it would be able to absorb not only those who were at present unemployed, but those who, year by year, reached working age.

‘DOCTRINAIRE VIEWS.”

Far from seeing any such prospect,be reminded them tliat Australia, which for many years past had been our second largest ..export maiket, ,taking last year' .£54,2-30,544 w;orth of goods, had found it necessary to curtail heavily her imports; that India, our largest customer, which last veur took £78,230,835 worth of goods had been allowed to drift into a state of grave disorder, and that in other quarters oh the globe British prestige and British interests, which were synonymous with the weekly wages of the British working man, had been sacrificed to doctrinaire views which had little relation to the realities of life.

He wa s not a pessimist. The facts lliat emigration had fallen to about 97 per cent, of the pre-M ar figure, that our population was annually increasing. while our foreign markets at present showed no signs ol expansion bat were diminishing, must ilxi faced. Wo bad a right to demand of our statesmen something more constructive in the way of an economic policy than robbing the till to maintain an ever-growing population of unemployed. That was a policy which must, within a measurable space ol time, lead to bankruptcy and disaster. Already wc bad a density of population of 408 persons to the square mile, as compared will 187 in France, 348 in Germany, and 3d in the Touted States, to mention the three leading commercial nations, and those countries were able to feed their own populations, and were not dependent, as we were, upon exports to pay for their food, nor, to the same extent, for their raw imfferial.

It was essential that we should get back at least to pre-war emigration limires and that we should, at the same time, find fresh outlets h>r our manufactured goods. There were no foreign countries which were willing or able to take our surplus population.. On the other hand, there were vast areas within the British Empire which the Dominions were anxious to fill, provided a markqt could he assured for the produce which those now settlers would grow. At the pic sen' moment, it was idle to talk of tavin„ all our foodstuffs and raw materials from the Dominions, as their popu a lions were not sufficiently great to enable us to pay for such imports with manufactured goods. M 0 I,w ’ then, an ever-growing surplus population in these islands, the maintenance of which, in idleness, was a dead weight on British industry, and we were anxious to find abroad fresh

consumers of our manufactured goods. On the other hand, we bad the Dominions anxious to obtain more population from this country. provided this country would buy the primary produce which that fresh population would grow.

He was not. blind to the difficulties, but if the immense sum of approximately £400,000.00 which had been paid out in benefits under the unemployment insurance scheme since November, 1920, had been made available for a scheme of Empire migration on a large scale, he thought that the problem would not have proved insoluble. It was still not too late. Expenditure on unemployment, at the rate of well over £40,000,000 a year, was still going on, altogether apart from a similar sum in respect of Poor Law relief, and it would he sound business- to capitalise now our probable expenditure over the next 10 years, if by so doing we could remove the incubus of unemployment in. this country and at the same time create now markets overseas for our manufactured goods.