OTHER PAPERS’ OPINIONS.

Putaruru Press, Volume VII, Issue 298, 25 July 1929, Page 4

OTHER PAPERS’ OPINIONS.

SURPLUS PRODUCTION. Can a free-trade unit of about 125 millions of people so dispose of its surplus productions as to undersell other countries in their own markets? Underlying the predictions of a United States world-wide trade drive—referred to recently by the Prime Minister of Australia —is the suggestion that that immense home market, based on internal free-trade with protection against the rest of the world, will permit an output so huge as to cut lumps olt United States production-cost and enable the surpluses to be “ dumped ” into foreign countries at prices that will make foreign tariffs negligible. This is supposed to be the American answer to the old economic contention that trade is exchange, and that a country which wishes to sell abroad must also buy abroad. “We ; have changed all ‘hat,” say the new economists, “ and we are going to j show that the world will buy the ; cheapest because it is cheap enough (owing to immensity of output) forthe poorest to buy.” Failing purchasing power in the “ dumped on ” countries will be pursued downward by falling prices of “ dumped ” goods. But nobody seems 'to have explained what will happen when (if) the purchasing power reaches zero. Will the dumped goods continue to be supplied gratis ? Somewhere in the argument there seems to be a missing link.—Wellington Evening Post. *