PAYMENT IN ADVANCE

Evening Post, Volume CXXVIII, Issue 29, 3 August 1939, Page 11

PAYMENT IN ADVANCE

LONDON REQUIREMENT

*■ "It is Unfortunate that the credit of NeAv Zealand" is in'such a bad state that people in England who have done business with us regularly for 20 years without a hitch should now find it necessary to have payment for goods in advance," said the head of a Wellington firm of importers today, after receiving from his principals in London a cable cancelling the. system of payment for goods when they land in Wellington and insisting on payment in • London before shipping anything.

"The Post's" informant believed that other importers had received similar notifications, and he thought, it might be an effect, of the recent regulation requiring importers to submit their financial requirements in advance to the. Reserve Bank for approval and also an effect of the publication of the Budget.

"I find myself in the position of having licences to import for the second half of 1939," he said. "Until last week goods for which licences had been issued could be ordered without any question and payment could be made by sight draft against delivery in Wellington. It is now necessary to fill in an 'application for remittance overseas in payment for licensed imports.' As I do not import, for my own use but bring in raw materials for use in factories throughout the country, it is almost impossible for me to determine when those goods will be required. In the application details are called for making it imperative to specify at what month the money will be required. At best it is only possible to make a rough estimation, and there is no guarantee that- the money will be made available. Incidentally, it is interesting to note that it is necessary to sign a declaration that the statements in the application are true and correct in every particular. Unless this declaration is signed no money will be made available. It therefore becomes necessary to declare information which is known to be indefinite, if not indeed, inaccurate, as accurate, in order to earn a living. "Today I have received a cable from my principals in England stating that they cannot ih future ship to New Zealand unless payment to our account is made in sterling in exchange for documents in London. Credits of this nature' are at present refused by the Reserve Bank, and I am given to understand that it will be two months before applications for remittances can be dealt Avith, which means that there must be a break of at least two months in continuity of business, and it is problematical whether permits will be issued by the Bank to make' business possible in future."