IMPORTERS’ CREDITS

Gisborne Herald, Volume LXVII, Issue 20142, 11 January 1940, Page 12

IMPORTERS’ CREDITS

GUARANTEE IN LONDON WORKING OF SCHEME Some new aspects of the credit arrangements made by the Hon. W. Nash in London, together with an indication of the extent to which British merchant houses are endeavouring to aid New Zealand in its present overseas financial difficulties, are contained in a letter just received by an Auckland house from its London shippers. “There seems to be some misapprehension in New Zealand regarding tile functions of the Export Credits Guarantee Department in London,” write the British shippers. “It is quite true that this department gives a guarantee, but this guarantee is in the nature of an insurance certificate which can be obtained by an exporter, but a premium is payable varying from 5s to 10s per cent, and then the department is only prepared to insure 75 per cent of the value of any shipment.

“No cash is paid by this, department unless the British sterling required in London is not received here by the end of June, 1940. The procedure is for exporters to take this insurance certificate to their own bankers, and tile banker will accept this as a security for an advance. Of course, on these advances, interest charges accumulate, and therefore the whole transaction becomes most expensive. “Up to now we have not thought jt necessary to have recourse to the Export Credits Department, as we have been able to finance shipments to a certain extent on our own securities, and in addition many of our customers have put up credits or have been able to get funds to London to pay for shipments, as in your own case.

“We feel that, at a time like this, we should endeavour to keep down charges, and not go to the expense of paying insurance premiums, etc., if it is possible to avoid doing so, as we feel our customers have quite enough charges to meet in view of the increased expenditure owing to the war. We have no doubt that you will agree with us in adopting this policy.”