A.—7.

improvement of the standards of living in the countries which, produce them. Unless countries like the Argentine Republic, Brazil, and India can obtain good prices on the world's markets for their primary products, it is idle to expect their wage standards to be improved, either in agriculture or in industry. The agricultural countries are largely dependent for their welfare on the ability to sell their foodstuffs and raw materials to the industrial countries. When a decline in industrial activity occurs, the agricultural countries aire the first and greatest sufferers. Nothing can help them more, therefore, than a concerted and determined effort to solve the problem of the business cycle on an international scale. This is perhaps the greatest economic and social problem of our times, as I tried to point out in my report reletting to the East. " I was extremely grateful for the appreciative remarks made about that report by various speakers, but there are one or two criticisms which I should like to try to answer. In the first place, I do not think that Mr. Hallsworth, British workers delegate will find any approbation of low wages. I would entirely agree with him that every effort should be made to raise wages in industry everywhere, and thai one of the most effective methods of doing so is by tradeunion action. But it is necessary to face the facts. If wages in Eastern industry immediately raised to anything like European levels, it would be impossible for its products to be sold at prices which the vast mass of consumers in the East could afford to pay. As Mr. Kupers pointed out in his remarkable speech, there must be some relationship between the level of industrial and agricultural earnings; and in countries which are 90 per cent, agricultural it is unavoidable that wages in industry should largely be determined by what the great body of peasant cultivators can spend on industrial goods. A second point was raised by Mr. Parulekar, Indian workers' delegate, who seemed to think thai I shared the view that no attempt should be made to deal with unemployment in India because Indian labour is migratory. I would like to draw his attention to page 73 of my report, where 1 take precisely the contrary view. I said: 'Formerly, unemployment was rendered less disastrous by the fact that the industrial worker could always fall back upon the village. In future, this is likely to become progressively less possible.' At the same time, though workers are no longer returning to their villages as in the past, the increase in the population of India is driving more and more of them into the cities in search of industrial employment, which inevitably tends to lower the standard of industrial wages. In order to cope with this situation, minimum-wage legislation might no doubt be of considerable value, but in itself it will not be of much avail unlesss there_ is a general increase of prosperity in the countryside. Mi. Hallswor th invited me to enlarge on the methods by which the adjustment between East and West should be secured. There is no simple method, no royal toad. It can be done by detailed negotiation; but it is certain, to my mind, that the elimination of low wages in the East can only be effected through increased production, both in industry and in agriculture.' This cannot be done, however, if the outlets for Eastern production on to the world's markets are closed. Negotiation cannot possibly achieve any positive result unless it is based on recognition of the fact that it is in the general interest to enable the East to increase_ its wealth and to raise its standards through international trade. The alternative is bitter economic warfare, and perhaps in some cases explosions ', which will produce disastrous consequences for the whole world. Of this possibility recent events appear to offer some examples. I hold with Mr. Kupers that a valuable beginning could be made in bringing East and West together by a regional Asiatic Conference, in which the difficulties and claims of the East could be thoroughly explained and sympathetically explored. That, I believe is the first step ... ' " / now propose to say a few words about the working of the Office and on this occasion I am perhaps entitled to speak rather more freely than I otherwise might, since any benefit which may result will accrue to my successor. . . " Some delegates seem to think that it is capable of expanding its efforts indefinitely without further financial provision. I was therefore glad that Mr Thorn, right at the beginning of the debate, laid stress on the impossibility of such miracles being accomplished. As Mr. Hallsworth said, more work can only be a,ccomplished with more money. It is impossible to increase the staff, as Mr Shn Ram and Mr. Parulekar suggested, in order to give more representation to particular countries or in order to carry out work which is at present receiving insufficient attention without enlarging the budget. I should 'like to give a few figures to show that tjie capacity of the existing staff has already been stretched almost to its limits. The number of letters received and despatched has increased from 54,743 in 1933 to 62,687 in 1937, an increase of nearly 15 per cent Vurina the same period the number of pages of Conference documents has increased from 8,475 to 11,204 —some 30 per cent. —while the number of pages translated has risen from 17,200 m 1932 to 20,600 in 1937, a rise of 20 per cent. During

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