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Wairarapa Times-Age SATURDAY, NOVEMBER 16, 1940. TIGHTENING THE EMPIRE’S BELT.

SOME people in this country have been contending forcibly of ° late that part of our duty, with the Empire at war, is to buy British goods to the greatest extent that our resources will permit. Our general restrictions on imports have been attacked, too, not- only by internal critics, but by representatives of British export mg interests —in one recent instance the Birmingham Chamber'of Commerce. Virtually everyone is agreed that essential imports should he bought from the Mother Country if she can supply them, but over and above that theie Ihiw been definite suggestions that the more freely we buy British goods the more shall we assist Britain’s war effort. A very different view of these matters was taken by the President of the British Board ol Trade (Captain Olitci Lyttelton).in a statement, reported in a cablegram from London yesterday, in which he said that war production could be increased only at the expense of civilian consumption and that this applied to the Empire as a whole, and not only to the United Kingdom. He added that : — Further restrictions on supplies for home consumers may be announced shortly; therefore the Government will not be sympathetic to requests by British exporters for increases in their trade with the Empire. It will be suggested to the Dominions that they could greatly contribute to the joint war effort if they decide to impose restrictions on civilian consumption similar to those effected in the United Kingdom. Obviously the Empire war effort will not be expanded,, on net balance, if goods which the people of the United Kingdom abstain from consuming are consumed instead in the Dominions. In the extent to which this country or any other Doming imports luxuries or non-essential goods from Britain, the total practicable war effort of the Empire will be cut down. These contentions were emphasised pointedly and in some detail by Lord Stamp, who is a member of the Economic Ad J visory Council, in observations reported with those of the President of the Board of Trade. Here, as in other Empire, countries, these questions demand very serious attention. While the demands made by the war are imperative, and can neither safely nor justly be evaded, it is of course desirable that every effort should be'made to maintain adequate living standards. In the interests not only of the body of consumers, but of traders and others whose livelihood is at stake, normal and necessary trade should be interfered with only to the extent that is unavoidable if war demands are to be met. While broadly similar economic demands are made on the whole Empire in this period of war emergency, the problems involved have their local and peculiar aspects in each individual country. Captain Lyttelton’s contention that war production can be increased only at the expense of civilian consumption is subject to certain reservations, some of which are perhaps ex- ’ eeptionally important in New Zealand. In most countries there is a considerable amount of economic slack which might be taken up by bringing unused productive resources into play, or by organising and using more effectively some of those that are in operation. It is one thing to perceive the increase in production that might be effected by a better use of existing resources and another thing actually 10 bring about the increased production that is theoretically possible, but the position from this standpoint certainly is worthy of methodical examination in New Zealand. Faced, as we are, with an inevitable decline in the available volume of consumers’ goods, it should lie both possible' and profitable to improve on the existing state of affairs with regard, for example, both Io the subsidising of employment and to expenditure on development work’. By well-considered action we should be able at least steadily to approach conditions in which our available labour force and other factors would be turned more effectively to account in producing essential goods and services. Pleasures of emergency organisation and special training may not only be made Io contribute to an effective war effort and to the maintenance of adequate living standards, but, if wisely directed, may help to open the way to an effective attack on the problems that will arise when the war comes to an end. TRADE BALANCE AND WAR COSTS. ONE of the questions arising out of the policy developments foreshadowed by Captain Lyttelton relates to the balance of trade. Britain is taking and no doubt will continue to take all the foodstuffs and other primary produce, notably wool, that this country can export.' She desires, however, to limit her own exports to the Dominions Io those goods Hie production of which in war time can be justified from an Empire standpoint. Trade in these conditions must be expected to lead not only Io restrictions on consumption in this country, but to a considerable expansion of our surplus of exports over imports. A step, and an important one, might thus be taken towards meeting out of current production a larger part than at present, of our national war costs. If, however, an increased surplus of exports is to be turned to account in this way it will be necessary to raise by internal taxation or borrowing considerable sums with which Io balance the marketing account. If sums obtained from the sale of produce overseas are used in meeting external war costs, corresponding sums must be raised in this country with which to pay farmers for their exported produce. There is, or should be, no question of attempting to do this by drawing on Reserve Bank credits, because that would mean inflation on a ruinous scale. In the extent, however, to which we are prepared actually to economise and make sacrifices in furtherance of the war effort, taxation and savings within the Dominion would provide a means of adjusting the position and maintaining monetary and financial stability. Measures must be taken in any case to set due limits to Hie amount of money and credit in circulation or there'will be superimposed on 1 lie shortage of goods which must be anticipated in any case a development of inflation which will make conditions for everyone very much worse Ilian they ever need have been. The position which has to be faced is that apart from the extent to which we can increase the available volume of goods and services by increased and more varied production, the heavy diversion of resources to the prosecution of the war is bound to entail ami impose deprivations. These stark realities are not to be evaded or overcome by monetary manipiilafion of any kind, though they might be intensified seriouslv in that wav.

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Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/WAITA19401116.2.25

Bibliographic details
Ngā taipitopito pukapuka

Wairarapa Times-Age, 16 November 1940, Page 4

Word count
Tapeke kupu
1,119

Wairarapa Times-Age SATURDAY, NOVEMBER 16, 1940. TIGHTENING THE EMPIRE’S BELT. Wairarapa Times-Age, 16 November 1940, Page 4

Wairarapa Times-Age SATURDAY, NOVEMBER 16, 1940. TIGHTENING THE EMPIRE’S BELT. Wairarapa Times-Age, 16 November 1940, Page 4

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