The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES." WEDNESDAY, DECEMBER 27, 1939. THE DOMINION'S TRADE

Gisborne Herald, Volume LXVI, Issue 20130, 27 December 1939, Page 6

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES." WEDNESDAY, DECEMBER 27, 1939. THE DOMINION'S TRADE

The overseas trade of the Dominion has been so seriously dislocated by the import control regulations, and, in the last month or two, by the war, that it is difficult to form reliable estimates from the latest returns. The October figures were thrown out of balance by reason of the exceptionally large exports resulting from the rush to clear stores and ship produce to Great Britain. In that month the exports showed an increase of 80 per cent on the corresponding month of

the previous year. On the other hand, imports showed the first really large decline this year, notwithstanding the fact that more overseas vessels

reached the Dominion. It might have been expected that the same general trend would have been maintained during November, but while this is the case in regard to imports it is revealed that exports actually showed a drop of more than 25 per cent. The exports, at £3,229,000, were the lowest for any November since 1934, while imports, at £2,881,000, were also the lowest since the same year. For the first time in four years, however, November trade showed an excess of exports over imports. It seems clear that the generally poor figures were largely accounted for by reduced shipping facilities and were a more or less natural counteraction to the higher returns in the previous month. Taking the figures for the first eleven months of the year, the trade position shows a considerable readjustment compared with last year, but, apart from 1938, the excess of

exports is still the lowest for many 8 years. Exports this year, at 1 £54,500,000, are almost the same as I for the same period of last year and j £2,000,000 higher than in 1936, but ! still £7,250,000 below the peak figures J of 1937. Imports, at £46,335,000, show l a substantial reduction on the two i preceding years, but are still higher i than in all previous years. The position for the first five months of the export year, commencing July 1, still leaves room for considerable anxiety, although there is evidence of some improvement. Owing mainly to the abnormally high figures for October, exports are slightly in advance of those of last year, but are still below . those of 1936 and 1937. Imports, on the other hand, are the lowest for the period since 1935, while the excess of imports, which is normal during the early months of the production year, is the lowest since 1933. If the present trend is continued, it seems probable that the production year will end with a fairly substantial export surplus and a consequent accretion of overseas funds, so that, under normal circumstances, it should have been possible to ease the restrictions which have so dislocated internal trade. So far as import trade is concerned, it is difficult to distinguish between the effects of the war and the operation of the import control scheme. Since a market is assured for the bulk of New Zealand's export surplus at better prices than obtained last year, it might have been thought that import trade could have been continued without the maintenance of artificial restriction*, at least insofar as trade from Britain is concerned. There are several factors which will automatically reduce imports during the war period. In the first place, the change-over in Britain to a wartime economy will inevitably mean that Britain has less to export, and the same consideration will apply to some other countries which generally supply New Zealand. A second factor is that inevitable price increases will tend to reduce the demand for imported goods, particularly those of the luxury class. Added to these influences is the entirely justifiable control of imports from foreign countries where the British Government is in need of all the foreign exchange that can be accumulated. In

these circumstances it becomes more difficult than ever to justify the arbitrary curtailment of imports from Great Britain, and the Government might well consider restoring freedom of trade with the Mother Country. There is another aspect of this question that has received insufficient attention. Despite Mr. Nash’s assertion that we can best help the Mother Country by reducing our imports from her, the British Government and British industry are appealing for the maintenance of export trade. This, after all, is only natural because Britain’s economic strength can only come from the continuance, as far as possible, of her overseas trade. Britain, incidentally, is increasing her purchases from New Zealand, and common fairness suggests that New Zealand should reciprocate. There should be no fear, unless inflation is carried further in New Zealand, of a flood of imports from the United Kingdom, but the removal of the existing restrictions would be a gesture of goodwill to the Mother Country and a definite contribution towards the war effort. This should be the aim of the Dominion at the present time and the trade figures all go to suggest that it could be accomplished without any ill-effects—-provided always that nothing is done internally to aggravate the causes which led up to the financial crisis. Mr. Nash, perhaps, is more concerned with building up London funds to repay existing loans, but if only the Dominion would do something to re-establish confidence in its administration the financial side would automatically right itself.