Evening star., 1941-02-27

nave Dee1l dDle 10 enjoy not only
stability but actual prosperity in an
era of terrific economic dislocation
The prices paid by the United King
dom's treasury for all of Australasia S
important exports products, except
wine and dried fruits, are on the
average about 25 per cent higher
than previously enjoyed. Thanks to
the liberality of the United King
dom. Australia alone enjoys an ad-
ditional $l00,000,000 in direct in
come, in the opinion of Prof. D. B.
COPELAND, one of Australias FORE
most economists.
AS a result of the liberal prices
paid for primary exports and the
enormous expansion in war indus
tries, the total national income of
Australia is about 1925 900 900 higher
than before the war. Prof. COPELAND
estimated it to be about 5000, ,0OO,-
600. Unemployment is less than it
has been at any time since 1928.
Catches in Arrangement.
There are a couple of catches in
this attractive economic arrange
ment, however. In the first place,
Australia and New Zealand have
been obliged to surrender their
economic independence in return
for the United Kingdoms S economic
underwriting. In the second place.
there is some uneasiness as to
whether, despite the best intentions
in the world on the part of the
United Kingdom, the shortage of
shipping space and financial exi-
gencieS may not compel the aban-
donment of the underwriting ar
rangement.
In return for guaranteeing the
purchase at liberal prices of the
basic exports of Australia and New
Zealand. the United Kingdom has
deprived those countries of control
over their foreign money balances
and purchases. Great Britain guar
antees to pay 13 pence a pound for
Australian and New Zealand wool.
for example, for the duration of the
war and one year thereafter. But it
pays those dominions in pounds
sterllng-not dollars. yen or any
other foreign exchange it may OBJ
tain by its judicious sales of the
crop. So it goes with other guar
anteed exports.
When an Australian wants to
subscribe to an American maga- =
zine or a new Zealander wants to
buy necessary part for his Amer
ican motor car the decision as to
whether he gets it is made ulti-
mately not in Canberra or in We'll
lington but in London. For the
United Kingdom has assumed con-
troll over the entire available for
eign exchange of such parts of the
empire as accept its economic un-
derwriting. 1t decides what pro-
portion, if any, Of the available
dollars shall be used to buy nom
military items outside the sterling
bloc. or course. the actual desig-
nation of which Australians may
subscribe to a popular American
weekly or what New Zealanders
may import an automobile part are
made by the local authorities, but
they in turn are vigorously con-
trolled as to total disbursements OF
that sort.
Occasional Complaints.
One occasionally hears COM
plants from Americans doing bus
iness in Australasia in non-military
items that the men allocating the
United Kingdoms dollar exchange
are unnecessarily ruthless in their
determinations against American
products. 1t is alleged that the
British exchange arbiters use their
authority to prevent Australasians
from using American products in Or
der firmly to entrench British COM
petitors with a view to postwar
monopolies of the Australasian
market.
What is not yet generally realized
in Australia, according to econo-
mists such as Prof COPELAND and
his colleague, Prof. L. F. Giblin, is
that there must be drastic reduc-
ton in consumption, despite the in
creased national income, if Aus
tralia is to emerge happily from the
war.
With more money for their prod
ucts and more money for their
labor, farmers, graziers and indus
trial workers flock to the stores for
goods they could not previously af-
ford. Stocks of foreign goods, such
as American cigarettes, however,
have almost disappeared in Aus
tralia. In New Zealand shoppers
are unable to purchase many types
of goods-even the famed blankets
which are sought throughout the
world. The mills are busy on mill
tary work and, as stores exhaust
their supplies, customers must be
turned away.
Gasoline has been severely ra-
toned to conserve foreign exchange.
In New ealand consumers are al
lowed 80 gallons per car per month.
The allotment of gasoline is some
what more liberal in Australia
Compulsory Saving Urged.
Economists Coplan and Giblin
would like to see Australia adopt
measures such as those proposed
by John Maynard Keynes, whereby
portion of the income received in
wartime is saved compulsorily, with
a view to cutting down consumption
in wartime and increasing purchas-