NOTES OF THE DAY

Dominion, Volume 25, Issue 69, 15 December 1931, Page 8

NOTES OF THE DAY

Overseas trade returns published to-day are evidence of the thorough and effective effort made by New Zealand to live within her income. Last month the balance moved in the Dominion’s favour by almost £1, 200,000. A much better guide is obtained from the figures for the eleven months ended November 30 which show imports down by almost 17 millions, a drastic economy partly counterbalanced, unfortunately, by a decline in exports of 10 millions. Nevertheless the favourable trade balance for the period is £8, 800,000, compared with £2, 100,000 at the corresponding stage last year, a gain of £6, 700,000. Even after allowing for exchange, the favourable, trade balance amounts to about 6-| millions, a sum that is not far short of our annual bill for “invisible imports.” It is most satisfactory, considering the times and the difficulties in which many other countries find themselves, that New Zealand is close to restoring a true trade balance. If that position can be maintained and even improved, it must react beneficially on our general credit although the internal problems represented by the. Budget and the low prices received for our exports still await solution.

Another good feature in to-day’s news is the more hopeful tone of thp fortnightly trade review from London. The Stock Exchange is perhaps too sensitive a barometer over short periods but its recovery last week was based on good ground, namely, the favourable view taken by the Chancellor of the Exchequer of the budgetary position. Sterling has also rallied under the influence of Mr. Neville Chamberlain’s confident statement and, to express it in the simplest terms, it cost 12 cerlts more to buy a pound on Saturday than it did on Tuesday last. Mr. Chamberlain’s statement that there had been no inflation should hardly have been necessary in view of the steadiness of British domestic prices, but may have helped to reassure foreigners, and the soundness of the Budget is a guarantee against inflation in the future. Britain’s financial integrity is bound to influence foreign opinion, especially by comparison with the unbalanced accounts of the United States and the latter’s recourse to loans. This view was expressed in these columns a few days ago and it is interesting to receive confirmation in the London review which speaks of the possibility that “money will start to flow from the dollar and retain info th# pound pterlitjjgi”