Westminster Bank Meeting ECONOMIC NATIONALISM.
I find myself very much in sympathy with what I regard as the outstanding point in the able address delivered to shareholders of the Westminster Bank by the Chairman, the Hon. Rupert E. Beckett. After making the fullest acknowledgement of the improvement established in our domestic trade during the past year and by no means forgetting the extent to which that improvement extended to the heavy industries, and during the closing months of the year had even occa- sioned some improvement in the figures of our export trade, Mr. Beckett nevertheless maintained that until the figures of our trade balance are very different from what they are today, and until the figures of unemploy- ment have been further decreased, our position is one which must continue to give grave concern. The past year, said Mr. Beckett, " has shown how inadequate is increased domestic trade beyond a certain point to effect a really drastic reduction of the formidable total of unemployed." How different is the position of our present trade balance compared with the pre-War days was well brought out by Mr. Beckett in the figures which he presented. Taking into account, as far as may be possible, both visible and invisible items of trade, our adverse balance in 1931 was over £100,000,000. In 1932 there was an improvement to £56,000,000 and in 1933 to only £4,000,000, but it seems probable that 1934 will again show a larger deficit. Before the War, however, there was at least a net annual balance in our favour of about £200,000,000 which was available for investment abroad.
CAUSES OF RESTRICTED TRADE.
Moreover, the cause of this contraction of international or world trade constitutes in itself an evil which, so far, has proved to be progressive in character. " To my mind," said the Chairman of the Westminster Bank, " no development of recent years is more to be regretted than that of economic nationalism or self-sufficiency, whose logical end would appear to be a world-wide series of closed citadels, with the passage of goods from one to another entirely prohibited. The pursuit of such a policy means retrogression, not progress." In this sentence Mr. Beckett admirably summed up •the position as regards the malady which is preventing a recovery in international trade. Chaotic exchanges, of course, play their part, but even this chaos in the exchanges seems to be wilfully intensified at times by this and that nation desiring a depreciated etchange to stimulate exports. Unquestionably, the outstanding needs of the moment are the establishment of an inter- national monetary standard, with some promise of stability, and a gradual removal of the artificial barriers at present obstructing trade.
BRITAIN'S DEPARTURE FROM GOLD.
For this chaos in the exchanges Great Britain has little to bear in the way of moral responsibility. It is true that our departure from gold in 1931 came as a blow to many countries and increased the disturbance of the world's exchanges, but it is equally true that we were literally forced off the gold standard by external influences beyond our power of control. Chief among those in- fluences was the refusal of the United States to acknow- ledge her responsibility as a great creditor country and to accept from her debtors payment in goods and services. She not only insisted on gold payments, but when such payments were made the gold was not (Continued on page 188.)
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(Continued from page 1864 allowed to function in - the ordinary manner. It was panicky withdrawals of gold from this country which forced us finally to abandon the free gold market, but we did not do so until we had given an earnest of our desire to keep faith by raising—at great cost-- huge credits in the United States and France. Indeed, we did not actually depart from gold until our supplies of the metal had reached a point which left us with.. little more than sufficient to discharge those dollar and franc credits which we had borrowed in our endeavour to prevent a departure from gold.
RETURNING TO GOLD.
Far different, however, was the action of the United States, which made its departure from gold at a moment when the country was overflowing with stores of the metal, and when the action was taken simply on grounds of expediency to meet a situation in the States which need never have arisen but for the great orgy of specu- lation. In the intervening years President Roosevelt has pursued a monetary and currency policy the end of which no one can see, but which up to the present has had the effect of intensifying the chaos in the exchanges and has seriously harassed the gold bloc countries. Bearing. all these circumstances in mind, together with our adverse trade balance and our altered economic position since the War, I am glad to note that while the Chairman of the Westminster Bank fully realizes the importance of a return by the United States to an international gold standard, he considers that, " under conditions such as those now prevailing, and having regard to the uncertainties attaching to other principal currencies, to attempt to stabilize now would appear to me to be dropping our currency anchor on shifting sands, only to have it swept away-again," and he added : " With one group of countries clinging rigidly to the, gold standard, another directly or indirectly knit to sterling, and still other important countries following independent courses, there seems no alternative for us but to pursue a policy which for the time being appears to suit our own interests best. Desirable as I consider it for this country, and indeed for all the major countries, to return to a gold standard, in order to introduce some measure of stability into world trade, embarrassed by a multitude of instabilities, the, time and circumstances 'do not seem ripe for any such step at present."
Not only is there need for caution in this matter of any premature return on the part of this country to the gold standard, but Mr. Beckett hai a very clear perception of what is a fundamental fact, . namely. that it would be difficuft to o for any return- to t international gold standard until a greater equilibrium of trade balances has been reached, and this can only be accomplished by freeing international trade from some of the restrictions which exist today. " The world, as I see it," said Mr. Beckett, "is moving towards economic partitionment, whereas its aim should be • economic unity. The full benefit of natural resources and,. of man's inventiveness cannot be reaped unless and until every constituent of the commonwealth of nations is performing that particular job. for which geographical or human characteristics have best fitted it."
Only at the end of his speech did the Chairman of the Westminster Bank make any allusion to the attacks which' are being made upon the British banking system. Theie attacks he described as usually having their origin in some political creed demanding the elimination of present proprietors and the placing of banks under State control. It is strange, however, as Mr. Beckett pointed out, that - this change should be advocated not, after any event or series of events which has demon- strated that the banks have proved unworthy of the trust. reposed in them, but actually at a moment when " the banks of this. country have surmounted the diffi- culties and complexities of recent years with enhanced prestige, and certainly with a record superior to that of any other grout of banks in any country of the world."
_(Continued on page 190.).
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(Continued from page-188.) The whole idea, of course, is fantastic, but, for that matter, so is the general programme of the Socialistic Party, a programme which brought the country within measurable distance of disaster in 1931.
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