Ashburton Guardian Magna est Veritas et Prævalebit SATURDAY, NOVEMBER 23, 1940. SUPPORT FOR STERLING.

Ashburton Guardian, Volume 61, Issue 37, 23 November 1940, Page 4

Ashburton Guardian Magna est Veritas et Prævalebit SATURDAY, NOVEMBER 23, 1940. SUPPORT FOR STERLING.

The British High Commissioner in New Zealand (Sir Harry Batterbee) has on several occasions made important pronouncements on Britain’s war effort, but none more striking than his latest statement on Empire trade, following, as it did, the announcement by the President of the British Board of Trade that restrictions are to be imposed. Sir Harry said that one of Britain’s paramount needs is trade with foreign countries to obtain dollar exchange for purchases from the United States. The other need, becoming more urgent every day, is for the employment of every man and factory, and all materials, for the war effort. “That means,” said Sir Harry, “that anxious as we are to continue trade with New Zealand, and to see that our trade is rebuilt on the old foundations after the war, Empire trade must take second place.” One important effect of the restriction should be the accumulation of larger sterling balances in London by the Dominions, India and the Colonies. More of the sterling paid for Empire raw materials and foodstuffs will remain in London for investment instead of being taken out .n manufactured goods. This 1 accumulation of funds will ease one of the strains on British finance and also help to maintain the era of low interest by creating liquid resources to assist in meeting Treasury needs. Empire countries should also be placed in a position to meet maturing loans and so swell funds seeking reinvestment. Thus the task of the Chancellor of the Exchequer, in bridging the wide gap between revenue and expenditure, may be performed without recourse to borrowing measures whose effect would be inflationary. The exchange policies of India, South Africa and New Zealand had already produced some of these favourable effects in the first year of the war. India’s sterling assets rose from £52,185,000 to £117,747,000 and New Zealand s from £7,110,000 to £19,750,000. , South Africa used her accumulation to redeem a sterling loan of £7,900,000. So far as Neyv Zealand’s policy is concerned, Mr Nash has indicated that he desires to keep sterling balances high, not only :o meet interest and capital commitments, but also to pay as large a part of the overseas war costs, estimated at £19,750,000 in the current financial year. The less we import from Britain, the more money we shall command from the sale of exports to pay war bills overseas and the less we need borrow from the British Treasury. The fact that the British Government, notwithstanding its own difficulties, has undertaken to lend money to pay our overseas war expenses, should be an incentive to New Zealand to refrain from adding to the sacrifices that oup kinsfolk at Home are cheerfully making.