EXCHANGE CONTROL

Evening Star, Issue 20995, 8 January 1932, Page 8

EXCHANGE CONTROL

REASON FOR INTERVENTION HIGH PROFITS OH DIVERTED FUNDS [Special to the -‘Star.’] WELLINGTON, January 7. _ Representatives of the larger business concerns in Wellington conducting both export and import trading have been securing authoritative information from bankers and Government officials which leads them, your correspondent understands, to believe that control over overseas exchanges will not result in undue hampering of normal business activities. Estimates made of the financial requirements to meet Government and local body overseas obligations during the year show that, unless there is a very large extension of overseas ordering, no difficulty will be experienced in meeting all requirements for overseas expenditure. In practice there is no doubt that when the New,' Zealand credits require to be outside the dominion, there will be some' scrutiny as to the nature of the expenditure, but for the goods ordinarily needed to maintain the country’s business, no difficulty will arise unless there is excessive ordering. Nor is it likely: that the moderate expenditure by New, Zealanders touring overseas will ha limited. . The real reason actuating control over exchange appears to be that very larger profits have been made on New Zealand j credits abroad by diverting them to.; other countries. As an example, if the ■ holder of funds obtained from reahsa-; tion of New Zealand products in Eng-; land was in a position to divert them,.! either to Australia or New Zealand, there would be a big financial advantage in placing these funds in the Commonwealth. Large operations of tins character are reported to have taken place. However, the Governments; control measures will ensure that New> Zealand’s money will be at New Zealand’s disposal.