CREDITS IN LONDON

Dominion, Volume 25, Issue 230, 24 June 1932, Page 10

CREDITS IN LONDON

Cessation of Pool NEED FOR LICENSES Warning to Exporters The necessity for exporters to com>ply fully with the terms and conditions of export licenses until the restrictions are removed was emphasised by the Minister of Finance, Hon. W. Downie Stewart, in a statement on the exchange credits pool yesterday, in discussing the reasons which had enabled the Government to do without the pool after this month, he said the export regulations had already been relaxed to a certain extent in view of favourable developments in the Dominion’s credit position. “In March last,” Mr. Stewart said, “when announcing the Government’s intention not to interfere with the rate of exchange and to retain the exchange credits pool, I pointed out that the procedure originally adopted by the Government in co-operation with the banks was not for the purpose of keeping down the exchange rate but as a necessary precautionary measure to see that adequate funds coul'd be purchased for Government requirements in London, and that ail exchange credits were conserved and used in the best interests of the Dominion. ‘‘Since that date monetary conditions on the London 'market have shown much improvement, and pressure on New Zealand has been relieved to the extent -of the £5,000,000 long-term loan which New Zealand successfully floated' on that market in April last. In addition, the Government has accumulated other liquid funds in London by the disposal on the market of giltedged securities held there. “Further, the ' remittance of cash from New’ Zealand to London at the rate of £1,000,000 a month, commencing from January last, will, with the June remittance and the foregoing cash resources, assure Government requirements for the current financial year. Following bn the New Zealand longterm loan of £5.000,000 being successfully placed in London, the export regulations here were relaxed to the extent of allowing the exporters to retain in London 65 per cent, of the exchange credits for their own overseas requirements. “Now that the primary need for the regulations and pool no longer exists, the Government has decided to repeal the regulations and release the pool as from the end of the current month. It. must be pointed out that the obligation still remains on all exporters to comply fully with the terms and conditions of the licenses under which goods have been or are shipped. “In making this statement I desire to acknowledge, on behalf of the Government,'the co-operation rendered by the trading banks in New Zealand in respect to the Government requirements in London.” FREE EXCHANGE Request of Producers VIEWS' OF MR. W. A. lORNS Dominion Special Service. Palmerston North, June 23. Exchange rates were briefly referred to by the chairman of the New'Zealand Dairy Produce Board, Mr. W. A. lorns, in the course of an address he delivered at the annual National Dairy Conference at Palmerston North today. Tie contended the primary producers were entitled to the value of their money in London. Mr. lorns said that as a member of the Producers’ Exchange Committee he had never heard one member of that committee. say the exchange rates should bo raised. 1 At no time had the Government been asked to raise the exchange rates. The request had been that exchange should be allowed to run free. The board considered that the primary producers, who made the wealth of the country, were entitled to the full value of their money in-London. There had been a great injustice in not allowing the producers the true value of their money. It had been said that an increase in the exchange would cost the Government an extra £3,000,000 in respect to committments in London. The farming community, however, would receive an extra £8,000,000. He thought that therefore the Government would have been well recompensed if it allowed the exchange to go free. The Prime Minister had promised that the restrictions on the exchange rates would be lifted at the end of June. Tie could not deal with the question as to whether the rate would go up or not, but he believed if they had a full market next year they would get a higher exchange than they had this year. Mr. Dynes Fulton, of Hamilton, endorsed tiie remarks, of Mr. lorns. Not once, he said, had the producers’ committee asked that the exchange be raised. All that had been asked for was that it be allowed to go free.