HIGH FINANCE.

Evening Star, Issue 23325, 22 July 1939, Page 27

HIGH FINANCE.

TO THE EOlTOtt ■ Sir, —Your correspondent, Mr MacManus, gives some amazing figures for New Zealand’s overseas trade during the past three years, supplied apparenlty by Mr Silverstone, of the Reserve Bank. For the three-year term of Labour Government pur exports are given as £278,000,000 (surely ho means £178,000,000) and our imports as £230,000,000, leaving an excess of exports over imports of £68,000,000 (sicl). Is this a slip, or is it Reserve Bank arithmetic ? He then accuses me of fouling ray own nest because I criticised certain aspects of past Government. If this is how criticism is viewed within the Labour Party I can assure your correspondent it is not so in freer political crclos. - i

The above figures were adduced to show that we were, not living on borrowed money during the Labour regime. I did not say we were. I said tho Labour Party had increased our dependence, •meaning dependence on the produce of overseas workmen purchased with our sterling resources. For example, ■ Professor Suteh, one of Mr Nash’s financial advisers, gives the excess of exports over, imports for the year 1938 as barely £3,ooo,ooo—more

} than £6,000,000 short of interest requirements. Over, the full three-year term —1036-37-38—the export excess was £1,000,000 short of covering even our interest charges alone. This rate of consumption of overseas goods is frankly admitted by the Government as impossible of continuance. When it stops, as it must now, our false standard of life must full. In regard to the defence loans, concerning which Mr MacManus says my argument-falls flat, I would point out that the Australian Joan was floated in the ordinary way on the English market. The investors therefore adjudged the security entirely on its credit-wor-thiness regardless of its purpose, and rated it rather low for the reasons mentioned in my letter. No Empire defence policy influenced this as it influences the granting of credits to East Europe. If occasion arose Britain could and would make defence credits available to Australasia in almost any amount, but these would of Necessity bo State-guaranteed, because owing to onr great indebtedness and the threat, actual or potential, of Leftist prodigality. we are not persona grata in the free market.—l am. etc.. C. N. D. M‘George. July 21.