Courtesy Reuters

Australia in the Changing East

WHILE Mr. Bruce was Prime Minister of Australia he used often to say that the country's fundamental needs could be summed up in three words -- men, money, markets. Australia has to have a larger population if she is to hold her 2,970,000 square miles of territory for the white race. She must have more markets before she can hope to support a larger population. If she gets the men and the markets the money will follow.

Let us in the same way accept a schematic approach to the question of Australia's changing position in the British Commonwealth and in the Far East (which to her is the Near North). And let us, also, make our examination from three angles -- trade relationships, defense, and immigration.

I. TRADE

First, trade relationships. We in Australia have been forced to do some very hard thinking about tariffs since the so-called "trade diversion" measures were announced on May 22, 1936. The new trade policy provided for increased duties and the limitation of imports by the application of a system of licensing. As a result, some £2,299,000 worth of imports were to be diverted -- £1,310,000 to the United Kingdom, £854,000 to Australian manufacturers, and £135,000 to "good customer" countries.

One objective was to redress the trade balance. The Commonwealth has an external interest bill of some £24,000,000 annually, yet in the fiscal year 1934-35 there had been a shortage of £8,000,000 in the funds available for payment. The adverse balance with the United States had steadily increased until it was £10,000,000, a situation made inevitable by large imports of automobiles, oil and tobacco. The new tariff schedule, therefore, placed higher duties on tobacco, Oregon timber, electric refrigerators, roller ball-bearings and many other imports from America; while the number of motor chassis that were to be admitted under license was to be that of the peak year ending April 30, 1936. The Government, it was explained, was acting in no spirit of retaliation for American tariffs, but, very unwillingly, under the spur of pressing national interest. President

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