More Overseas Borrowing Urged

Press, Volume C, Issue 29651, 23 October 1961, Page 16

More Overseas Borrowing Urged

(New Zealand Press Assoctetton)

WELLINGTON, Oct 22. Increased overseas borrowing was urged by the chairman of Wright, Stephenson and Company, Ltd., Mr C. U. Plimmer, last week. Addressing the annual meeting of shareholders, Mr Plimmer said the immediate cause of the present crisis, which was producing so much disturbance and spread of gloom, was the run-down of the country’s oversees funds. The extent to which the country had been developed in the last decade alone was enormous and much of the cost of this work had directly involved the use of funds derived from export income. But the situation was even worse than that, because as well as using export income tor development, overseas borrowings between 1960 and 1961 were reduced to the extrot of £lom. At March 31, last, the overseas debt of approximately £l36m was no higher than in 1996. “To alleviate this problem of overseas funds, the only method to produce quick re-

suits is to barrow externally,” said Mr Plimmer. "There is nothing wrong about this and, having regard to the great potential of this country, it was certainly detrimental to repay low-interest bearing loans when funds were plentiful when actually we should have been increasing overseas reserves to help in times of felling export incomes. “Had our overseas funds been maintained by borrowing to meet a substantial portion of the cost of capital equipment, etc., both for the Government and the private sector, the present crisis, with all its upsets, could have been avoided.” Mir Plimmer said that various post-war crisis situations had made it well-nigh impossible for any long-term planning by commerce and it was time more logic was introduced to the long-term management of our external finances.