PRODUCE AND MARKET REPORTS FROM DAY TO DAY

Evening Post, Volume CXIII, Issue 62, 15 March 1927, Page 11

PRODUCE AND MARKET REPORTS FROM DAY TO DAY

"INVISIBLE EXPORTS"

BRITISH BALANCE OF TRADE

"Evening Post," 15th March,

When the value of exports from New Zealand is below that of the imports of the Dominion, quite properly there is occasioned anxiety to Government, bankers, traders, and others directly interested in the wellbeing of the country. Manifestly the country must pay in goods for what it imports in goods. Money very seldom passes; differences are adjusted in another way. For instance, the landed cost of a motor-car may be £350. To pay for that car in goods it would be necessary to ship and ultimately sell the produce of the country, which is practically all it esports. This might be done in a simple way aB I follows: — £ Tour bales of wool at £29 116 Ten boxes of butter at 84s „ 42 Ten crates cheese at £5 50 Ten 361b lambs at lOd per lb 15 Ten 561b sheep at 6d per lb 14 100 Cases apples at 10s 50 Two tons hemp at £2S 56 Two hundredweight of tallow 7 £350 Ii this quantity of produce is sold it will pay for the £350 car, and all that will have to be met will be email charges for mercantile services. If the produce failed to exceed £300 in returns then there is a balance against the producer of £50. It may be there in the value of the car, but it is a debt on account of an import. But often as this balance of trade is shown against the United Kingdom, it does not follow that that country is difficulties, as this would be if the balance of trade were against it, if the imports were greatly in excess of exports—produce or manufactured goods, because England has what are called "invisible" exports. That mean;- wealth coming in from other sources than the realisation of produce or manufactures. Everybody in business knows this elementary fact, but elementary facts are so often forgotten that one may be forgiven in doubting whether they are always grasped and understood. __ • New Zealand has "invisible" exports too. They are not of great extent, but in two respects are similar to those of the United Kingdom. They represent money coming '.n from investm«t outside and in money brought to the country by visitors, and a prop ,rtion that money expended by them in the country before they leave it. No one seems to know exactly what these "invisible" exports of Great Britain amount to, and none seem to be able to say with accuracy what New Zealand's invisible exports amount to either. The Board of Trade of England estimated for 1925 that these exports were worth to Great Britain £429,000,000, made up in millions as follows:— £ Overseas investments 250 Shipping 115 Commissions and sundries 64 £429 New Zealand's exterior investments will largely be in companies in Australia, but some of its funds are derived from rubber plantations in the East Indies; and among the growing invisible exports are receipts from its tourist traffic. Messrs. Belisna and Co., a financial firm of high standing in the city of London, have gone fully into the invisible export question, and they have come to the conclusion that "last year (1926) with a vidible adverse trade balance larger by £72,000,000 than in 1925, we were able, r merely to maintain our exports of capital but to increase them by £25,000,000; that is to say we lent abroad about £112,000,000 as compared with £87,000,000 Messrs, Belisha, however, do not hold that any relaxation of productive effi t can be compensated for by returns from exterior investments or other sources of income not derived from the sale of primary produce and manufactured goods. Ihey remark:—"We see no objection to the underestimating of our hidden reserves so long as this modesty does not lead to pessimistic utterances about the country that are unwarranted. We would all sooner invest our money in ari mdertakmg that was shrewdly known to possess hidden reserves than one that put all its goods in the shop window. What we are now eagerly and confidently looking forward to is a country settled down again to hard work, as a result of which, instead of such folly as importing coal, we shall again obtain our full quota of the world's export trade. So long as we take care of the visible exports, the invisible exports of this country may be relied upon to take care of themselves."

The visible' exports of New Zealand tor tlie tune being, may be counted as the country's all. They must always exceed in value the imports, and with care and good management in their disposal they may be shown to have done so by the end of June nest. ■