CONSERVATION OF LONDON FUNDS

Press, Volume LXXV, Issue 22726, 2 June 1939, Page 12

CONSERVATION OF LONDON FUNDS

* Alternative to Import Control CHAMBERS OF COMMERCE to Submit plan O’HESS ASSOCIATION TEI.EQEAM.I AUCKLAND, June 1. Reference to the recent correspondence with the Prime Minister (the Rt. Hon. M. J. Savage) regarding an alternative scheme to import regulation for the conservation of sterling funds, and a decision to take immediate steps to prepare a plan for submission to the Prime Minister through the Associated Chambers, were made at a meeting of the Auckland Chamber of Commerce. The “breakdown in the exchange control and import selection scheme of the Government” were terms used in a letter from the Associated Chambers, asking for suggestions for alternative proposals. The position which had just developed was that firms holding licences to import had found that these licences carried no guarantee that sterling funds would be available, the letter said, and holders of licences were being refused sterling accommodation. Several proposals had already been put forward. One was that such regulation as was necessary, and the provision of London funds should be a matter lor the trading banks. Other proposals, which had been endorsed by the importers’ national conference held at Wellington in January, were that the amount of sterling each importer could use for 12 months should be fixed, based on two or three years’ average imports, less whatever was necessary to conserve London funds, and that local manufacturers should be protected by listing such goods as were to be prohibited or restricted by means of permit. It had also been suggested that the Government should vary the direction of trade by listing items subjected to restrictions from certain countries, and set up a representative tribunal to hear and decide appeals. Mr J. A. C. Allum said he did not see why it had been necessary to change the former procedure of control of sterling funds by the trading banks. Mr N. Spencer, who presided, said that if the present import regulations were kept on, suggestions could be made to make them run more easily. Several firms had imported more than was required for the first six months of the year, as the Government had refused to spread imports over the second period. “There is too much rigidity in the working of the regulations,” said Mr Gainer Jackson. “The period during which the licences must be exercised is far too short. Many firms have had to import in excess of their requirements, thus building up frozen assets, and incidentally weakening the exchange position. One difficulty is that wo cannot transfer licences from one line to another, and the market is overstocked in some lines and understocked in others.” Mr Jackson considered the chamber should do nothing to encourage the Government in the regulations, but should attempt to free trade from Government interference. • ATTITUDE OF TRADING BANKS (I’HESS ASSOCIATION TEI.KGHAM.) WELLINGTON, June 1. The availability in the next few weeks of the trading banks’ sterling assets for meeting second period import licences and permits to require exchange was mentioned this evening to the chairman of the Associated Banks, Mr R. C. Addison, who wrote the following statement: “The London funds of the trading banks arc not mortgaged. The bonks are certainly watching them closely; but are continuing to distribute them in the manner which they consider most .suitable in the interests of their customers and New Zealand as a whole.”