RATIONING OF EXCHANGE

Press, Volume LXXXVIII, Issue 26723, 6 May 1952, Page 6

RATIONING OF EXCHANGE

REPLY TO BUREAU OF IMPORTERS STATEMENT BY PRIME MINISTER (New Zeaiana Press Association) WELLINGTON, May 5. In spite of warnings giveh last year and earlier this year, importers still desired to place orders well in excess of New Zealand’s overseas income, said the Prime Minister (Mr Holland), commenting to-night on the view of the Bureau of Importers that exchange rationing measures as imposed by the Reserve Bank were not necessary. “The action being taken now has the two-fold purpose of ensuring that expenditure on imports does not place an undue strain on our overseas reserves, and ensuring that 1953 will be a reasonably satisfactory import year without too severe restrictions on the availability of exchange,” said Mr Holland. He said it should not be forgotten that as a result of the import restrictions introduced by other sterling area countries New Zealand would, in the absence of safeguards, be swamped with surplus goods from overseas, which would be against the interests of the people as a whole and of importers, manufacturers, wholesalers, and retailers. Questions and Replies Mr Holland said that while he was in Auckland he received a deputation from the Bureau of Importers. Questions then raised were:—“ (1) “Will your Government permit importers to honour all orders placed in the sterling area before April 1. whether firm contracts or signed orders?”

(2) “Will your Government guarantee that payment will be authorised so that remittances can be made to pay for these goods?” Mr Holland replied:— “For firm orders which have been placed overseas before April 1 and accepted, exchange will be provided to enable payment to be made subject to the following conditionsi-r-“(a) That where the imports are subject to import licensing it must be established that the goods will be imported during the currency of the licence.

"(b) To the extent that firm orders placed and accepted have outstripped the availability of funds, to that extent the Reserve Bank reserves the right to spread payments according to the availability of funds. In doing so all relevant circumstances will be taken into account." Mr Holland added that the attention of importers should be drawn again to the Reserve Bank’s announcement of April 1, which included:—“lmporters who require an allocation should lodge their applications as soon as possible. In the interim, to prevent any avoidable interruption to the handling of current transactions, the banks are being authorised to meet the immediate overseas commitments of importers, provided they are satisfied that each transaction is in the normal course of business and has not been speeded up in any way.”

Cases which did not comply with the above requirements would be referred to the Reserve Bank, and would be dealt with on their merits. Another question was:—“Concerning the anticipated £50,000,000 of exchange to be held in reserve by the Reserve Bank for high priority imports, can we have an assurance that to assist British industry and to maintain full employment in the United Kingdom, a large proportion of these funds will be devoted to the purchase of completely manufactured goods and not used lor the purchase of raw materials for manufacture in New Zealand?” Mr Holland replied:—"Every effort will be made to ensure that the allocation of funds for both raw materials and finished goods will be dealt with in the fairest possible proportions."