TREND OF TRADE.

Auckland Star, Volume LXIX, Issue 135, 10 June 1938, Page 8

TREND OF TRADE.

EXPORT AND IMPORT.

BANKER'S REVIEW.

EXCESSIVE OPTIMISM.

[ Dealing with the trend of trade in the Dominion, the chairman of the Bank of New Zealand, Mr. A. T. Donnelly, at the annual meeting in Wellington to-day, stated, inter alia: —

During the year trade conditions generally have been active, although there was a period when retail stocks were moving more slowly than imports, leading to considerable overstocking Public revenue has been buoyant, and the Minister of Finance has announced a surplus of £810.000 for the past financial year, as compared with £472,000 for the previous year. The total revenue for the year amounted to £.'50.059.000. "being an increase of £4.912,000 over 19.'57. The sources of revenue chief!v contributing to this increase were income tax. which rose from £0,019.000 to £9.079,000; Customs duties, which rose from £9.499,000 to £10,759.000; and sales tax. which rose from '£.1.044.000 to £3.499,000.

'•While exjvorts in the past year have increased by £4,500.000, imports have risen by £10,500,000. The relatively greater increase in the value of imports illustrates the well-established fact that high or over-importation is the normal corollary of high export prices. Once a favourable export season is established and accented by the business communitv. the tendency is to place heavy overseas orders which may prove to be excessive at the time of arrival. . . . Trade dislocations remit from the excessive optimism generated by high export prices as well as by the excessive pessimism generated by low export prices. The common sense and good judgment of business men are of particular importance in a country in which external trade plays <=o important a part as in Xew Zealand.

"These over-large importations have been the principal eause in the decline in New Zealand's London funds. The position with regard to imports should a-s nn previous occasions, soon adjust itself. Moreover, the proceeds of a considerable portion of the Dominion's produe*.are. of course, received after March 31. A consideration of the main items of export shows how exceptionally specialised our export trade is. For the year ended March 31. 1938. dairy produce, meat and wool accounted for £54.300.000 out of a total export value of .£(l.-1.000.000. The relatives figures are: — £ Hairy produce 23.500.000 Me.it 14.500.000 Wool 10,000.000 £54.300,000