TRADE STATISTICS.

Auckland Star, Volume LXIV, Issue 181, 3 August 1933, Page 14

TRADE STATISTICS.

METHODS OF COMPUTATION. DIFFERING VALUES. Dr. E. P. Neale, secretary of the Auckland Chamber of Commerce, has forwarded us the following comment regarding a recent article on trade with the United States: — "Your report would suggest that the figures for the balance of trade between New Zealand and U.S.A. were supplied by me. In supplying figures in connection with the export and import trade between New Zealand and U.S.A., I was, however, careful not to effect any subtractions, by reason of the fact that in the official statistics exports of merchandise are expressed in terms of New Zealand currency, whereas imports if expressed in terms of £ s d (in whatever part of the British Dominions) are kept in those pounds while other currencies are converted to sterling (i.e., English pounds) at the current bank rate of exchange prevailing at the date of shipment; 10 per cent being added to imports in each case. It is not legitimate to subtract the export figures from the import figures, seeing they are really expressed in terms of different units. It would be just as logical to try to subtract bushels from centals.

"In the same way, in arriving at the total value of imports by reason of a simple addition of Australian, South African and English pounds, our official statistics commit a similar fallacy, in that no adjustment is made of any values expressed in pounds irrespective of what pounds they may be. It is obvious that the effect of the New Zealand practice in this matter is to understate the excesß of New Zealand imports over exports in connection with any particular country. "The Customs Department claims that this treatment of our overseas trade is necessitated by the Imperial Coinage Acts and New Zealand Proclamations applying them to this Dominion; but, having read these proclamations, I consider there is room for doubt as to whether these proclamations are really open to this interpretation. It might he mentioned as a matter of interest in passing that the procedure adopted in Australia in the matter of recording overseas trade statistics is on substantially similar lines to that operating in New Zealand, that is, exports of merchandise are expressed in terms of Australian currency, and imports are converted where necessary to English sterling at the ruling rate of exchange, again with the exception that imports from New Zealand, South Africa and other British colonies using £ s d are recorded in the corresponding local currency values. "Some attention has been given by the Australian statistical authorities to the question of converting all imports to Australian currency values. This would require an amendment of the Customs Act, however, and -would upset the existing basis of valuation for duty purposes. The present somewhat anomalous position is due in part to the legal, interpretation placed on an ambiguous phrase in the Australian Customs Act, and in part to a long standing practice of the ' Australian Customs Department. "The present practice has .important consequences in respect of the basis of assessing Customs duties. This memorandum is, however, prompted solely by the need for referring to the statistical implications of the practice, and this is therefore hardly the place to raise these other considerations which are, however, in fact even more important than the statistical issues involved,"