TRADE AND FINANCE

Evening Post, Volume CXXVIII, Issue 5, 6 July 1939, Page 12

TRADE AND FINANCE

PRODUCE & MARKET REPORTS FROM DAY TO DAY

IMPORT CONTROL ITS GENERAL EFFECT REGULATION OF BANK CREDIT ■ "Evening Post," July 6. In a .special message to members of the Auckland Chamber of Commerce, Mr. A. Ely, president of that body, stresses "the most serious disadvantages known to the commercial community of New Zealand" by the import control regulations. It is stated in the message that "the importer is affected primarily because of the direct effects of the restrictions. j "The manufacturer is r affected for two reasons—because of the direct effects of. the restricted : importation of raw materials and -because of the fact that local industry cannot at the moment meet the extra demands for such goods as were formerly in competition with imports. "The farmer is affected because his costs of production, must be enhanced. "The general public are affected by the fact that the cost of living is increasing under the import regulations —as a result of the scarcity values created for certain commodities. The short period of the first half ci' 1939 has,- in fact, under the method oil import licensing actually ■■ adopted, resulted in a serious shortage ot many goods and a remarkable surplus of certain, others."' THE LONDON FUNDS. j The president observes that while the Prime Minister "assures us the regulations are designed to develop secondary industries, the Minister of Finance assures us the regulations are to build up London funds. "The ■Government has thus ' given more- than one reason for its action, but it has not mentioned the principal factor causing such a serious depletion of the London funds.of the banks trading in New Zealand —i.e., the phenomenal internal expenditure by the Government. "The expedient adopted seems unlikely to achieve quigkly enough a safeguarding of the London funds. "New Zealand has been faced with a shortage of London funds before, as in 1920 and 1931-32; so that this is no new factor in national economics. Previously the.responsibility to rectify this was on the banks, and the problem was handled effectively by them along the lines of regulating credits. This was done without world confidence in New Zealand being diminished and without inflicting serious hardships on New Zealand citizens." VARIOUS SUGGESTIONS. . The Auckland Chamber of Commerce; states the president, "felt that it;should take the opportunity again to. express to the Government its consciousness of a need for repeal of the import control regulations, stressing, at the same time that credit control by banks is the most satisfactory expedient for dealing with such a situation. If some further restriction on imports is needed—which the chamber "doubts—it should be effected an a less rigid way than obtains under the present regulations. "We have made other suggestions at the. same, time.. At the present time oversea loans *siM beof more help than,-internal, loans. Moreover, iia raising i rof "interesff"rates will do much to make New Zealand a more attractive place for capital: "Finally- the fact has been ' often overlooked (and is not sufficiently •appreciated) that Great Britain is Our customer for four-fifths of our exports, and any action militating against •her; will probably be confronted with *™lls%? ctwa by Great Britain against UfA™ lThe * Sr?wiii of feeling towards more protection fpr the home market in Great Britain has received a great unpetus by the appointment of the new Minister of Agriculture"