OVERSEAS FUNDS

Evening Post, Volume CXXVIII, Issue 42, 18 August 1939, Page 11

OVERSEAS FUNDS

NEW CREDIT FACILITIES

Mr. Fraser said that from representations that had been made to the Government it was evident that there was considerable misunderstanding as to the arrangements made through the Reserve Bank in regard to the allocation of overseas funds. "At present import licences are in excess of the arqount of overseas funds immediately available," he said, "and importers have been handicapped by the uncertainty as to when overseas funds can be provided. To remove the uncertainty, and make the best possible use of available resources, the statistics of import licences already granted or likely to be granted during 1939 have been grouped into broad classes, such as national security and health, export industries, and domestic industries. "The figures so assembled have provided a basis to be used by the Reserve Bank in issuing to importers remittance authorities definitely fixing the months within which any particular importer will be able to obtain from his trading bank the overseas funds to I pay for imports included in any. import licence. ESSENTIAL IMPORTS. "In fixing the basis for allocation of funds accruing to the Dominion month by month, some measure of preference in respect of funds available up to December next has been accorded to the more essential classes of imports from a national point of view. The authorities, however, will cover the whole of the import licences, the portion that cannot be provided for by December being covered by allocation for various months from January to June of 1940. If some of the goods are not actually required between now j and December arrangements can be made for the goods to reach the Dominion when required during the first half of 1940, as the currency of the licences has already been extended until June, 1940. "A point I would like to stress," said the Minister, "is that the remittance authorities represent an assurance from the Reserve Bank that overseas credits will be made available to importers in the particular months indicated in the authorities. This assurance should, where necessary, enable importers generally to make arrangements with overseas firms for ffoods to be shipped when required on terms providing for payment in accord with the remittance authorities. In other words, as soon as importers receive their authorities, they will be in a position to make definite arrangements for payment for goods. "In cases where payment for imports from the United Kingdom has to be made later the arrangements recently made in London by Mr. Nash will assist in overcoming any difficulties that may arise. These arrangements include guarantee of commercial credits up to £4,000,000 sterling. Accordingly it is open to a British exporter who desires to obtain payment before the time named in remittance authority to obtain a guarantee from the Export Credit Guarantee Department, and with this he should have no difficulty in obtaining from his own bank accommodation at least to the extent of 75 per cent, of the amount involved. BRITISH IMPORTS ONLY. "The export credit facilities are, of course, available only for imports from the United Kingdom, but in some cases, where difficulties arise in arranging importation from other countries on a basis of payment being partly delayed for a few months, it will be .possible to obtain the goods from the United Kingdom. On this point I may say that the holder of a licence to import from any other country is at' liberty to import the goods covered by the licence from the United Kingdom. "In issuing remittance authorities, the Reserve Bank'has regard firstly to the national interests of the Dominion, and secondly, within the same class of imports, to the relative urgency of the needs of individual importers so far as they can be judged on the information available. Generally, the arrangements have been kept as flexible as possible, in order to obtain the maximum benefits from overseas funds as they accrue month by month. In some cases a position may arise where a local manufacturer is able to make satisfactory arrangements for the bulk of his raw materials but is held up through not being able to arrange for necessary supplies of a particular commodity. In such cases the circumstances should be reported to the trading bank with which the importer deals, for reference to the Reserve Bank if necessary, .when every endeavour will be made to overcome the difficulty. Generally any cases of real difficulty or hardship arising out of these arrangements will be dealt with as sympathetically as possible, but active co-operation on the part of all importers will greatly facilitate the i smooth working of the whole system."

Under a new set o£ conditions arranged by the Government, importers in New Zealand, as soon as they receive their authorities for the import of goods, will be in a position to make definite arrangements for the payment for the goods. This was announced last night by the Acting Prime Minister (the Hon. P. Fraser), who said that in issuing the remittance authorities the Reserve Bank would have regard, first, to the national interests, and second, to the relative urgency of the needs of individual importers, as far as they could be judged.