The Evening Star FRIDAY, JULY 18, 1947. Dollar Difficulties.

Evening Star, Issue 26156, 18 July 1947, Page 4

The Evening Star FRIDAY, JULY 18, 1947. Dollar Difficulties.

The withdrawal by Great Britain of another 100,000,000 dollars from the American loan, which has intensified the fear in Washington that the whole. 3,750,000,000 dollars will vanish well before the middle of 1948, is of considerable concern to New Zealand. Each sale of an article produced in a hard-currency country, whether it be a motor car or a packet of cigarettes, even the admission price to a theatib screening a Hollywood film, helps to deplete Britain’s dollar reserves, for the settlement of adverse balances between this Dominion and the dollar countries is effected through London.

The warning given by the Minister of Supply, Mr Nordmeyer, when speaking in the Ad-dress-in-Reply Debate that “ a crisis might face the Dominion in the latter half of this year or early in 1948 because of the difficulty of dollar exchange ” was a timely reminder of New Zealand’s obligations. New Zealand cannot expect to enjoy a high standard of living based in part upon dollar imports when the people of the Mother Country are desperately in need of food. It is to the credit of the Minister of Finance, Mr Nash, that he has discouraged the importation of hard-currency goods required in private trade, but State expenditoiref. on substantial quantities of coal and machinery cannot be endorsed. ,

New Zealand has for many years experienced' an adverse trade balance with, the United States and . Canada. Imports from the United States last year amounted to £11,793,000, but exports came only to £9,700,000, leaving' a trade deficit of £2,093,000. In the last nine years N6w Zealand has drawn .three times as many dollars as she has earned, about 25,000,000 dollars being the adverse balance with the United States in that period. The margin has narrowed in recent years but, while Great Britain is experiencing dollar-trad-ing difficulties, New Zealand should at least curtail her expenditure to a point where the balance with the United States-is near parity.

* The implications in Mr NordmeyerV remarks that the Government did not intend to use recently-established machinery for borrowing, scarce currencies are welcome. The United Kingdom has always been New Zealand’s best customer and, on a trade basis, has bought twite as much from New Zealand as was sold to her. The large reserves of sterling held on New Zealand -account, created by British purchases -of this country’s produce, provide a very sound argument against going into debt with a dollar country. The sense of responsibility shown by Mr Nordmeyer and his grave warning should be heeded by all thinking New Zealanders.