FINANCE-PUBLIC AND PRIVATE
THE FUTURE OF BRITISH TRADE
BY ARTHUR W. KIDDY. - DURING the past fortnight there have been certain public utterances on the subject of trade which deserve a wider audience than those before which they were delivered. The first speech I have in mind was that of Mr. Amery, given at a banquet .of the British Overseas Banks Association. Another was an address delivered by the Chairman of the Mercantile Bank of India at the annual meeting of the shareholders of that institution, and yet another was a remarkable speech by Sir Felix Schuster to the shareholders of the British- Italian Banking Corporation, in the course of which he gave some impressions of a visit he has made recently to Italy.
MR. AMERY'S VIEWS.
In his speech to the Overseas Bankers Mr. Amery, as Secretary for the Colonies, was, of course, more especially concerned with the volume of trade between this country and our Overseas Dominions, and he gave some very interesting figures showing that for the past year our exports to the Dominions and India alone, without taking the rest of the Empire into account, were greater than our exports to the whole of Europe. The still more important point made by Mr. Amery was the importance of ensuring the maintenance of the British Gold Standard upon a solid, favourable trade balance. Last year we had an adverse balance of nearly £400,000,000 so far as visible trade was concerned, and although when all allowance is made for invisible exports the Board of Trade estimates show a small balance on the right side, it is one which, as Mr. Amery said, is utterly inadequate to sustain the great fabric of the development of the Empire or feed our trade overseas, which is always dependent -on overseas investments to consolidate trade from year to year and stimulate the whole system of our trade. There is a sense in which bankers, and international bankers especially perhaps, are inclined Sometimes to lay a little too much stress upon our invisible exports in the shape of banking and financial transactions as a means for keeping the trade balance right and maintaining the Gold Standard. Mr. Amery was thoroughly justified, however, in emphasizing the point that unless we have got a really ample margin in the way of trade balance so that the Gold Standard maintains itself on a strong basis and not by the surrender of gold, we shall be in a position of weakness and sub- serviency to the great holders of gold across the Atlantic. " History," said Mr. Amery, " has shown no example of a nation whose banking and financial strength has permanently outlived its industrial strength."
FALL IN INDIA'S IMPORTS.
In his speech to the shareholders of the Mercantile Bank of India, the Chairman,- Mr. Ryrie, naturally dealt more particularly with the state of industrial and financial affairs- in our Indian Empire, but the connexion between those conditions and some of our industries at home is rather striking. The past year was a very good one for India as regards her export trade, the total sterling value- of merchandise exported, on the basis of a is. 6d. exchange, being £305,000,000, which was a " record." We know,' of .course,, that in connexion with this great favour- able - balance IndiaThas -abicibed and is still absorbing large amounts of gold, and it • has to be recognized that such gold absorption is stimulated by the fact that, compared with commodity prices in India, which are much higher than-before the War, gold, as measured in rupees, is cheaper. In the opinion of Mr. Ryrie, however, it is equally true that the extent of India's favourable trade balance—in other words, the decline in her imports at a time when exports are so high—is to be explained by the fact that there is a wide margin between the prices India obtains for her produce and those she has to pay for manufactured goods, or, in other words, the grower of the produce is not making sufficient ph;fit to enable him to buy manufactured goods on a pre-War scale at post-War prices." How far this hits home to some of our English industries, and not least to those in Lancashire, as reflecting upon the results of restricted output and high prices here, certain of the industrial centres must determine, but the remarks of the Chairman of the Mercantile Bank of India seemed to fit in very closely with those of some of our English Bankers, who,' when commenting at the recent annual meetings upon our smaller trade with the East, drew attention to the effect of high prices and reduced output.
WASTED GOLD.
And if this connexion is not a fanciful but a real one, it is impossible not to be struck with its far-reaching consequences. First we have increased unemployment in the manufacturing countries themselves. In the second place we have an unfavourable trade balance as the result of the restricted output and high prices, with the inevitable restriction in our exports, and in the third, place, as regards India, it would seem that one of the effects is to give that country the power to absorb (and to hoard) vast sums of gold at a moment when the metal was never more needed as a basis of legitimate expansion in credit at the world's lending centres.
INDUSTRIOUS ITALY.
Both to industrial and financial circles the importance of Sir Felix Schuster's address consisted largely in the fact that it furnished what is regarded as an impartial survey of financial and industrial conditions in Italy by one who is a recognized expert in finance and who, by reason of his long banking and Chamber of Commerce experience, is also an authority upon industry. That the foreign trade of Italy has greatly increased, par- ticularly in the matter of her exports of manufactures, had already been known, but something also has been said and written concerning low wages in Italy and conditions of discontent. A very different picture, how- ever, is given by Sir Felix Schuster, who declares that the country gives the impression of a hive of industry ; " wherever you go you see the people hard and cheerfully at work ; mendicancy, the plague of olden times, has disappeared from the streets. The understanding of the close interdependence of the two main factors of pro- duction, Capital and Labour, seems to be one of the happiest characteristics of the new spirit which governs the destinies of the country." And, later, Sir Felix said that the. people appear to be united in a common policy, the result of which has been the disappearance of strife between Capital and Labour. I find, too, that this same impression is conveyed to not a few business men from this country who have recently visited Italy and who testify, among other things, to the very high state of organization of some of the industries, especially, perhaps, some of the newer industries, and of the excellent arrangements made for the safety and comfort of the wage earners in the big industrial concerns. In a word, Italy, which like Great Britain, has ever since the War en- deavoured to shoulder manfully the responsibility of financial obligations entailed by the conflict, seems to have now concentrated her energies into a veritable industrial crusade, having for its object the recovery of the financial ravages effected by the War.
IN SEARCH OF INSPIRATION.
Inciting these three interesting and suggestive speeches, I should not like it to be supposed that I am the victim of pessimism with regard to our own trade outlook. Only quite recently in these columns I emphasized the fact that while tthere was great depression in many of our key industries, trade in other directions was above rather than below the average. Neirertheless, I am entirely at one with Sir Robert Horne, who has so frequently insisted that we have not made anything like the best use of our post-War adversities, by using them as an impetus to greater effort. We seem in this country to be too content to put out about one half of our strength. To say that the GovernMent is half-hearted about economy—when economy is so urgently needed—expresses the situation very mildly. The mass of the community, too, persists in the belief that we are richer instead of poorer since the War and, in place of emulating the industry of other nations, seems more disposed to seek relief along the lines of compelling a_ limit as regards international hours of labour. Whether, as the result of the wholly'admirable plan framed by the Daily - Mail of sending representative British workmen to the United States that they may visualize conditions in that country, we shall find on their return that their imagination has been captured by the intensive campaign of output in that country, remains to be seen. No matter what the source of inspiration, however, there can be no question that we need in this country every possible kind of spur to increased effort if we are to hold our own in the international economic struggle which follows almost inevitably upon the War. Fortunately, there are not wanting signs that the country as a whole is gradually perceiving that of the many post-War problems none is more important than the industrial, and in this increased perception of realities we get, perhaps, the best ground for greater hopefulness with regard to the outlook.
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