IMPORT CONTROL.

Auckland Star, Volume LXX, Issue 88, 15 April 1939, Page 7

IMPORT CONTROL.

THE FLIGHT OF CAPITAL.

OVERSEAS COMMENT RESENTED.

Strong exception to comments recently expressed by Professor J. B. Condliffe through the British Broadcasting Corporation on the necessity of import control regulations is taken bv the Bureau of Importers. "Obvious'ly the professor is completely out of touch with current affairs in New Zealand," states the bureau. "It is nonsense for Professor Condliffe and Ministers of the Crown to say that the import control regulations are designed to build up trade with Great Britain when hundreds of lines from Great Britain are being severely cut and in many cases entirely prohibited. Import licenses already issued for the second half of 1939 indicate that the position will be much mote serious than in the first six months."

The bureau takes the view that the depletion of London funds was due to a fall in exports of £8,000,000 and not to excessive imports, which were actually lower by £750,000, compared witli 1937. Ministers and Professor Condliffe had not referred to this fall in exports. The bureau contends that the serious fall in New Zealand's overseas funds from £46,000,000 to £7,000,000 in two years could not be charged principally to the trade position, but to a. flight of capital. Mention is made to the flight of New Zealand funds to New York due in the first instance to a fear of war in Europe; and, secondly, to the low interest rates arbitrarily fixed by the Government, the rates being insufficient to attract investment capital from abroad and keep investment capital within the Dominion.

It is contended also that there was a complete absence of confidence abroad in tho Socialist administration of the country, with the result that old. investment capital was being withdrawn from the Dominion and no new capital flowing in. Tho bureau says that in quarantining investment capital within the Dominion by import control regulations the Government had effectually shut out the flow to the Dominion-of investment capital from abroad. Normally the inflow exceeded the outflow.