GOODS FROM AMERICA UNDER LEND-LEASE PLAN

Dominion, Volume 35, Issue 7, 3 October 1941, Page 6

GOODS FROM AMERICA UNDER LEND-LEASE PLAN

Minister’s Statement On Procedure CO-OPERATION WITH COMMERCIAL . TRADERS

“The extent to which we are called upon to interfere with normal trading practices between New Zealand and the United States of America is conditioned by the extent to which war circumstances aie compelling the change,” said the Minister of’Supply and of Industries and Commerce, Mr; Sullivan, in a statement last night on the LeaseLend Act as it affects New Zealand. u “The Government’s intention is to the fullest extent to invite cooperation from those engaged in commercial trading who have special training in this direction,” the Minister said. Ihis, of course, must be consistent with economy and must be within the solemn commitments made by the British Government to the U.S.A. Government and endorsed by the New Zealand Government. “Through the Ministry of Supply, the Department of Industries and Commerce and the Supply Mission, established in Washington, we are rendering full service to those importers engaged in procuring goods outside a direct Government purchase. We shall continue to do this to the full. It only remains for importers to co-operate with the Ministry of Supply.

“We are determined that consideration of all the problems associated with procurement shall he fully discussed between officers of the department and representative traders, and must always be decided so as to ensure the maximum war effort. More than this it is not possible f° r me t° Government’s Policy. Amplifying the statement made by the Minister of Finance, Mr. Nash, earlier this week, Mr. Sullivan said the policy of the Government. was: 1. “We will procure under lend-lease only essential requirements. 2. “Import licenses for any source of supply are not being granted for any other than bare requirements necessary to war economy. 3. “Normal irade will be maintained with all Empire countries to the fullest extent that supplies' are available, “The New Zealand Government, in common with the United Kingdom Government, has guaranteed that the distribution of all lend-lease goods will be rigidly controlled by the Government. The method of distribution will, wherever commercial distribution is practicable, be such that there will be a fair return for services rendered and. arrangements made Will exclude opportunities for speculation or profit by private agents handling lend-lease goods as agents for the New Zealand Government. Insofar as arrangements have 'been completed for handling lendlease goods through commercial channels the basis of the transaction has been arrived at after consultation and with the full agreement of the commercial principals. Non-Warlike Items.

“Warlike supplies automatically come within the definition of ‘Defence Article’ as provided for in the Act. As far as they are available, they will be supplied Lend-Lease to the order of the New Zealand Defence Department. As far as non-warlike items are concerned, there is nothing more certain than that the Government will need the advice and co-operation of the New Zealand business houses in the preparation of suitable co-ordinated orders for submission to Washington for procurement under the Act. Already insofar as this co-operation has been needed, the evidence is that it has been readily available and to an extent and understanding which has proved the wisdom of enlisting such co-operation rather than attempting to establish new organizations. “The major items are not an established Axed list of items, but those upon which agreement has been reached, and which offer the best facilities for co-ordination and submission for procurement under Lend-Lease are:— "Steel, Including alloy steel and steel products such as wire; wire ropes; tube; tinplate, etc.; non-ferrous metals; oil and petroleum products, excluding motor spirits; motor vehicles. Fertilizers; ball and roller bearings; agricultural machinery; paper board, including cardboard and container board; wood pulp,; timber; medical supplies and instruments; tractors; insulated cable. Subject to Amendment. “This list is subject to amendment from time to time, and is dependent upon our ability to establish the machinery for handling it in conjunction with the commercial people both at the point of supply, in New Zea-

land, and in London, before operation may take place under Lend-Lease. In placing all orders for procurement under Lend-Lease, the Ministry of Supply must satisfy the American and United Kingdom authorities that the goods are required for maintaining the maximum war effort

“An Important factor In the LendLease procedure compelling changes in distributice methods is that the goods come to the New Zealand Government through the British Government and they must be retained as the property of the Government unless prior consent of the President of the United States has been given for their transfer.

“In the case of consumer goods it is anticipated that the power of transfer will be given to become effective at the point where the goods pass to the consumer or the manufacturer, subject to proper safeguards against exploitation. In the meantime - the Government will retain title to the goods and they will be stored where storing is necessary, on a consignment basis by the stockist, or distributor. It is obvious that under this system where the Government carries all the risk, to the point of consumption, that normal recompense to the agent will require some adjustment.” > Ordinary Channels. Dealing with the importation of goods from America through ordinary channels, Mr. Sullivan said United States export control was an administrative system to secure a strict control over the destination of certain listed goods and the device was closely affiliated with the control of materials and equipment Included in the defence programme of the United States. "The regulations controlling exports from the U.S.A, provide for three types of licences which depend not only upon the commodity listed as controlled, but also upon the proposed destination of that commodity. “The priority system is designed principally to aid the United States defence programme. It can be used to aid civilian production, but it is not the policy of the Administration to use priority action indiscriminately. Priority Classes.

“Under priorities, products fall into three distinct classes: “1. Goods which cannot be delivered unless the order has a priority rating. This in effect confines the entire production to defence needs. “2. Materials which are allocated by the Government, so much to defence work and the balance to civilian goods producers, in the order of their importance.

“3. Materials which are on the priorities 'Critical Items’ List. This is a list comprising almost 300 items on which the Army and Navy may issue preferential ratings. Manufacturers of these materials must give first consideration to orders with a priority rating and may distribute the balance of their output to their regular civilian goods customers.

“The effect of this system on New Zealand contracts for supply or manufacture in U.S.A, may now- be readily seen and arising from the necessity for direct Government representation from New Zealand in the United States it is the duty of the Ministry of Supply to afford our Washington office the full story behind each order so that the Washington office may obtain the best possible priority ratings.”