TWO-THIRDS SHORT

Evening Star, Issue 23352, 23 August 1939, Page 10

TWO-THIRDS SHORT

RESOURCES FOR PURCHASE OF RAW MATERIALS SERIOUS RESTRICTION OF SECONDARY INDUSTRY FORESEEN NCT ENOUGH FUHDS TO KEEP INDUSTRIES WORKING l From Oor Parliamentary Reporter.) WELLINGTON, August 23. A definite and serious shortage in the activity of New Zealand’s secondary industries is predicted by the Wellington Manufacturers’ Association. The members of this organisation have been advised by circular that investigation into the position of New Zealand’s overseas funds discloses that the resources available to purchase in Britain the necessary raw materials for New Zealand industry are inadequate to the extent of two-thirds of the real requirements.

Therefore, manufacturers are advised to “ cut their coat according to their cloth.” This communication, following last week’s official announcement of the method to be adopted in allocating overseas credits till June, 1940, states: An investigation was carried out by a committee appointed by the Wellington Manufacturers’ Association, which worked in conjunction with the New Zealand Manufacturers’ Federation. The information passed on to members is the result of interviews with the governor of the Reserve Bank, the Acting Prime Minister (Mr Fraser), and the Minister of Industries and Commerce _(Mr Sullivan). “ Experts have been engaged 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 seaason,” adds the staement. “ A figure has been arrived at which is as near correct as can he estimated, after allowing for emergencies, including adverse climatic conditions and the realisation of prices of products overseas.”

The conclusion is reached that the money allocated for the payment of raw materials for the coming six months is not sufficient to keep New Zealand industries working. Payment for the balance of import' licenses 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. “ Provision has been made for full payment of all goods imported under the existing licenses,” continues the letter, “ 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 their financial requirements up to the end of December, and probably tho balance will be divided into two further periods of three months.”

Ifc is pointed out that only £4,000)000 of the £9,000,000 export credits arranged hy Mr Nash was available for the purchase of British manufactured or partly manufactured goods, some of which comprise New Zealand manufacturers’ raw material*. “ Unfortunately. no authority in New Zealand has any control over London credits. These are merely created for the use and benefit of shippers and manufacturers from England, and can only ho operated upon by application from them. Part of the credits, no doubt, will 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.” Manufacturers arc advised to bo careful to endorse sale notes to ensure freedom from responsibility for late deliveries, non-delivery, or any increases of prices caused by financial exigencies overseas.