SUPPLY OF RAW MATERIALS

Evening Post, Volume CXXVIII, Issue 46, 23 August 1939, Page 13

SUPPLY OF RAW MATERIALS

CURTAILMENT PREDICTED

CREDITS. INADEQUATE

MANUFACTURERS' VIEWS

Restriction in the activity of New Zealand's secondary industries is predicted by the Wellington Manufacturers' Association. Members of this organisation have been advised by circular that an investigation into the position of New* Zealand's overseas funds discloses that the resources available for purchase in Britain of the necessary raw materials for New Zealand industry are inadequate to the extent of twothirds of real requirements; therefore manufacturers are advised to "cut their coat according to their clotli." This communication follows last week's official announcement of the method to be adopted in allocating overseas credits till June, 1940. " | The investigation was carried out by a committee appointed by the Wellington Manufacturers' Association, which j worked in conjunction with the New Zealand Manufacturers' Federation, says the circular. The information passed on to members is the result of interviews with the Governor of the Reserve Bank (Mr. Leslie Lefeaux), the Acting Prime Minister (the Hon. P. Fraser), and the Minister of Industries and Commerce (the Hon. D. G. Sullivan). FUNDS AVAILABLE. '•Experts have been engaged in estimating the full extent of the funds New Zealand will accumulate in London up till the end of June, 1940, as the result of the coming export season," continues the circular. "A figure has been arrived at which is as near correct as can be estimated after allowing for emergencies, including adverse climatic conditions and realisation prices of products overseas. "With the full knowledge that the amount available in London at the end of June. will be many millions of pounds short of requirements, the Government considered it expedient to divide the funds into classifications from the standpoint of urgent requirements and directional sources.. Defence and Government requirements come first, then medical needs and essential foodstuffs, followed by necessities in primary production. Raw materials for secondary industries come about fourth on the list." Adding that the money allocated for the payment of raw materials in the coming six months is not sufficient to keep the New Zealand industries working, the circular says that payment for the balance of import licences is being arranged under a scheme of deferred payments spread over the succeeding six months. On the deferred part of the allocation the Reserve Bank will give an undertaking to the trading banks that the money allocated will be paid on the date arranged. PAYMENTS FOR GOODS. "Provision has been made for the full payment of all goods imported under existing licences," continues the circular, "but those payments cannot be arranged to coincide with the date of shipment. A rough estimate of the position is that manufacturers are receiving about one-third of their financial requirements up to the end of December. Probably the balance will be divided into two further periods of three months. "Applications for additional licences or licences for the next Customs period will be considered on their merits, but will only bt granted by the Customs Department in collaboration with the Reserve Bank. Consequently it is likely that fresh applications for imported goods will be drastically dealt with." The circular adds that the Minister of Finance (the Hon. W. Nash), while in London, arranged for export credits from the Board of Trad^ amounting to £9,000,000, but with £5,000,000 earmarked for defence a credit of only £4,000,000 was left for the purchase of British-manufactured and partiallymanufactured goods. It should be remembered that these lines were often New Zealand's raw materials. "It is estimated that a considerable portion of thi- amount can be used for the purpose of manufacturing in New Zealand," concludes the circular. "Unfortunately no authority in New Zealand has any control of the London j credits. These are merely created for the use and benefit of shippers and manufacturers from England, and can only be operated upon by application from them.. Part of the credits will no doubt be useful to finance manufacturers, who are unable or unwilling to ship goods on the deferred payment system adopted by the Reserve Bank of New Zealand."