BARTER V. GOLD

Rotorua Morning Post, Volume 3, Issue 623, 30 August 1933, Page 2

BARTER V. GOLD

TURKEY'S NEW IDEAL favourable trade balance soughT at Any cost. CURRENCY & TRADE CONTROL. More thqn a year ago Turkey r§alised the futility of trying to carry on international transactions on a gold basis when she and, for that matter, most of the world hadn't enough free gold to guarantee their commitments. At the same time Turkey refused all offers of foreign money. She wouldn't give the required guarantees. So, with little money and less desire for foreign debts, the Ministers at Ankara ruthlessly cut down imports. They were determined upon a favourahle trade balance and a stable currency. The Turks, famed the world over for their art of coffee making, awoke one morning to find that they had nothing with which to make it. The beans were all imported. Abruptly the Turks were reduced to the Go'vernment formula of 85 per cent. pulverised wheat, 10 per cent, pulverised dried peas and 5 per cent. pulverised coffee, with perhaps a dash of chicory. And I defy any firstclass cook to make a palatable cup of coffee out of that. I was in Turkey at the time. It was vile stuff — even the smell of it. Balancing Accounts. But the Turkish Government wanted a favourable trade balance. And neither coffee nor tea nor sugar mattered. The Government said, too, that it would get along on its taxes. It had added a "crisis" tax to the income tax ,and there were Customs taxes also. The officials at Ankara then drew up a "grand list." Each country was included, showing its Turkish imports. "Now," decreed Turkey, "we will import only from those countries which buy from us, and we will import absolutely no more than we export to them." And since then Turkey has kept a daily trade halance-sheet, like a bank balances its accounts. A new kind of business has sprung up in Turkey. Exchange certificates sell according to supply and demand, and as every exporter knows that he has a second profit coming to him on his shipment, when he sells his certificate to some importer, the business is a thriving one. Rrnkpvs Who usfiri t.n sell stocks and

bonds now act as "contact men" — though very quietly, for the Government frowns upon traffic in exchange certificates, although it has not yet forbidden it. Complications for Importer. These certificates, too, complicate matters for the importer who holds merely a Customs permit number. A canny Anatolian farmer ordered a thoroughbred cow from America and had it bred with a fine bull before shipping. He at once applied for his Customs number to get her in early. The Customs authorities informed him immediately when the cow arrived, although he could not get her in on the quoth that month. But the cow had to be fed; and he himself went every day to feed and water her. It took a lot of his time, but the cow had stood the journey well, and the farmer chuckled to himself, "I will be taking her home next month." But he didn't. Some holders of exchange certificates got in ahead of him. He hegan to worry. He watched his cow anxiously each day. He had the first number to be called on the following month. No exchange certificates holders were appearing. Surely the cow could wait till then. But the calf came at the very end of the rnonth, and the next day the Customs official asked him which cow he wanted to take home! The owner was beside himself. He was afraid to separate the calf and its mother. He finally decided to leave both in the Customs. He took the cow at the end of that month, and the calf at the beginning of the next month. He paid over two months' demurrage and duty on two cows. Thus Turkey very quickly gained a favourable trade balance, which secured her currency, even if it is not on the gold standard. But the Turkilsh official had further plans. The peasants of Anatolia had thousands ,and thousands of bags of unsold mohair; they were slaying their historic flocks of goats in preference to feeding and watering them through a long drought. The farmers couldn't sell their wheat; and the Turks generally were not relishing their "coffee," of which wheat was 85 per cent. That, plus the scarcity of tea and sugar, rankled with tlie ordinary Turk, who also had lost his fez and was told he had to learn the Latin alphabet. Back to First Causes. But Turkey had a plan. She didn't have money, but she had goods for exchange. Russia, her neighbour, didn't have money either, but she also had goods for exchange. According-^ ly, last summer, Russia granted Turkey huge credits of Russian products, to be exchanged, during the course of the next 20 years, for Turkish products. Russia immediately took a large consignment of mohair to weave into cloth, and overnight the despair of the goat owners changed to confidence. And Turkish factories were quickly started to make necessary goods that were no longer imported. Last summer, too, the Agricultural Bank was authorised to buy and sell wheat in order to free farmers from the necessity of selling their erops when maxkets are unfavourable. The amount purchased will vary, but all purchases, transport and storage, wil be centralised under a wheat committee which will pay cash, thus giving the farmers money to circulate in the country. Turkey next sent representatives to visit Western Europe to get commercial agreements hased on barter. Aus-^ tria and Czecho-Siovakia have agreed to buy tobacco for their monopolies against the export to Turkey of their manufactured goods, and Hungary also is considering a barter agreement. Last December the Minister of Economy issued a comtnunique stating coiiditions under which goods may be imported free of trade quota against

— ' — . -m _ . export of specified' Turkish products to Japan, Brazil, India and Portugal. Shoftly thbreaf ter Turkey also solved her coffee problem. She h'as agreed to import all- her coffeC from Brazil for three years, in- exchange for certain of her products. Leading the World. And so Turkey, which out a few years ago had the customs and superstitions of the Middle-Ages, to-day is' leadiiig the world in a new method of iriternatibnal trade — barter. Her people are not feeling the depression. Of course, th'6 few tourist hdtels are empty, but her peasants who have always been poor, are rio poorer. There is no unemployment problem, and everyone seems to have enough to eat. There ,are new primary schools vocational ,and agricultural schools, puhlic buildings, railroads and hosp'itals. To pay for them there is the new "balance the Budget" tax, the income tax and th'e crisis tax. Everyone who has a cash income pays a tax. The total minimum tax is 10 per cent. A man earning the equivalent of ls 8d a day actually receives is 6d. A clerk making £10 a month receives £7 6s. Although the Turkish Government has considered ,a stable currency and a favourable trade balance of primary importance, she also has found time to improve various industfies. Everyone Envployed. Back of all these decree's, regulation and quotas, and their interpretations, is the earnest desire of the Turkish Government not only to keep a favourable trade balance and a stable currency, but also to encourage exports to improve loeal indufctry, and to make the people happy, healthy, up-to:date, and intelligent. One may say what one likes about the absurdity of keeping livestock in th Customs for months because the quota is full, about the unfairness of Bourse Exchange Control certificates, and even the inconvenience of not riding in a sleeping car — but nevertheless Turkey is definitely forging ahead. And she is pointing the way to international barter with the use of currency only in the nation itself. Her system is not to raise high tariff walls. • She is perfectly willing to let in goods, provided hers can go out. Gold is not needed. Barter depends upon produce, the result of labour. This new Turkey has at the head of her Government a handful of tremendously capable, brilliant men. It is they who are responsible for her amazing progress. — Gladys Thompson, in the New York Herald Tribune.