Wairarapa Times-Age TUESDAY, JANUARY 10, 1939. INDUSTRIES AND IMPORTS.

Wairarapa Times-Age, 10 January 1939, Page 4

Wairarapa Times-Age TUESDAY, JANUARY 10, 1939. INDUSTRIES AND IMPORTS.

j\fUCH of .Hie discussion to which the policy ol' import regulation lias thus far given rise is at cross purposes.. The Bureau of Importers claim, lor example, that the ultimate effects of restricting imports will be to throw large numbers ol people out of employment, to make goods of many kinds deal el and to foster uneconomic Xew Zealand industries.

It has to be considered, however, that the declared aim and desire of the Government is that trade should expand as freely as possible. During the last year or two, the Dominion has been buying more imports than it can continue to buy and pay for. The object of regulating imports no doubt is to reduce them to the volume which we can continue to buy and pay for. The methods of regulation adopted may be good or bail, workable or unworkable. Since, however, the Government was lately re-established in power with an ample majority, there does not seem to be anything else to do than io wait and see how its policy works out.

Meantime it should be noted that an attempt to reduce imports to the volume that we can continue to buy and pay for need not imply either an attack on external trade or an. attempt to foster uneconomic local industries. The. Bureau of Importers is advocating the setting up of a Royal Commission to determine whether New Zealand industries are able to manufacture economically. Before such an inquiry could serve any practical purpose it would be necessary to develop clear ideas on the subject of what constitutes an economic industry in this country.

The Bureau of Importers seems at least to lean to the opinion that a New Zealand industry is uneconomic if the goods it produces might be imported more cheaply. To advance that contention as being of universal applicability is, however, to wander from a region of reality into uniealitf. Imports are really available to us only if we can find the means of paying for them. Otherwise, no matter how cheap they are, they might as well be non-existent so far as New Zealand is 'concerned. If we exclude reckless spending leading to bankruptcy. our ability to purchase imports is governed and determined bv the amount of sterling credit we are able to establish in London, over and above what is needed for the service of debt and the maintenance of necessary reserves.

Within these limits, full use has been made, and no doubt will continue to be made, of our sterling resources in buying imports. There is no other' obvious use to which these resources could be. put, unless we should elect to undergo a, period of self-denial in order io expedite the repayment of external debts.

There is, or should be, room for readjustment in buying from Britain some of the goods we are buying at present from foreign countries and from other Dominions which buy relatively little from us in return. For instance, our aggregate trade with Canada and Australia in 1937 showed an adverse balance of close on eight, millions, and in the first ten months of 1938 our total adverse balance of trade with these Dominions

was over £7,500,000. Our adverse balance of trade with the ■ United States was close on two millions in 1937 and in the first ten months of 3938 climbed to over £4,300,000. Some of the complaints now current suggest that an unduly drastic and hurried attempt is being made to adjust these balances and others, but Unit they stand in need of adjustment is self- ~ evident.

The point is in any case to be emphasised that the total volume of our imports must be governed by the amount ol our sterling credits and that in the extent to which it is open to ns to produce manufactured goods over and above the quantities imported, the argument that goods might be imported more cheaply than they can be produced internally becomes irrelevant. If we are in any case importing all the goods we can pay for, the question of whether a New Zealand manufacturing ' industry is or is not economic becomes one to be determined in light of internal considerations—amongst others that of whether it is belter that men should be employed in industry than lhat they should be dependent on one form or another of unemployment relief.