The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES." GISBORNE, TUESDAY, FEB. 6, 1940. THE DOMINION'S TRADE

Gisborne Herald, Volume LXVII, Issue 20164, 6 February 1940, Page 6

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES." GISBORNE, TUESDAY, FEB. 6, 1940. THE DOMINION'S TRADE

Since they cover the first year of import control the figures relating to the Dominion's overseas trade for the calendar year 1939 are of particular interest and. in some respects, at least, not a little surprising. The figures for the month of December showed a general falling oil in trade but it is possible that this was due to shipping conditions and the returns, therefore, do not necessarily provide an accurate indication of trade trends. Exports during 1939 exceeded £58,000.000 and were approxiamtely the same as in 1938. The figure was the third highest in the history of the Dominion so that, on this basis, last year should have been a prosperous one for the people of New Zealand and at. least more prosperous than any year prior to 1937. If the export income was at a high level, however, so was the expenditure on imports, for the figures reveal that, despite the farreaching and irksome control of imports, the value of goods purchased overseas showed a comparatively small reduction on former years. Compared with the previous year there was certainly a drop of more than £6.000,000. but the value of imports was still higher than in any year between 1926 and 1936, while the excess of exports over imports, £8,622,000, was, with the exception of 1938, the lowest since 1931.

It is this excess of exports that provides the normal key to London funds of which so much has been heard in recent years. Out of that excess has to be paid overseas debt charges and other invisible import items. The cost of these is variously estimated at from £10,000.000 to £15,000.000, and the real figure is probably about £12,500,000. If this figure is accepted, last year New Zealand failed to pay its way to the extent of about £4.ooo,ooo—and this at a time when the returns from exports were abnormally high and when, under import control, the people had been compelled to go without many things which are generally regarded as necessities. The influence of the war may help to rectify the position, since there is an assured market for all exports and a further compulsory re-

striction of imports, but this same factor may lead to other and more serious complications of another sort. The indications are that the internal income of the Domonion will at least be maintained, and probably increased as a result of the war, but there will inevitably be fewer goods upon which this income can be spent. There is thus created, as has been pointed out before, an inflationary situation and unless steps are taken to ensure that spending power is not in excess of the goods available for purchase a truly dangerous position might rapidly develop.

Detailed figures relating to last year’s imports are not yet available but returns have been issued in regard to motor vehicles and this one item provides some interesting material. It was fully expected, of course, that imports of motor cars, since they are to some extent luxuries, would be drastically curtailed, and this expectation was realised because the value of motor imports fell from £5,429,875 in 1938 to £4,188,778 last year. So far there is little ground for complaint, but it will be recalled that when the import restrictions were introduced Mr. Nash laid much emphasis on the need for diverting more of our import expenditure to the United Kingdom market, and even insisted that British manufacturers would benefit from the import “selection” system. It is surprising, thei'efore, to find that in 1939 imports of motor vehicles from the United Kingdom were reduced by nearly 30 per cent while those from other countries were cut down by only about 15 per cent. Strangely enough, Canada, which is one of New Zealand’s poorest customers," actually sold more motor vehicles to New Zealand last year while purchases from Great Britain were nearly £1,000,000 less than the year before. This is a perverted sort of preference to the Mother Country and one which Mr. Nash might find difficulty in explaining away when again seeking favours in London. Certainly it is not the sort of import selection the public was led to expect. The total value of motor vehicle imports last year was the lowest since 1935. so that this is one industry which has severely felt the effect of import restrictions. The public generally will have little ground for comj plaint that this class of import has been singled out for drastic reduction, but it does find extreme difficulty in reconciling some of the anomalies that

exist under the system of control. It

is common knowledge, for instance, that there are some straight out luxury lines which still find their way into the Dominion while everyday necessities such as matches and sewing cottons are in short supply and have to be rationed. Apparently whisky and other spirits are not restricted except that there is an arrangement by which payment is to be deferred. It is a. shocking commentary on the conduct of affairs in the Dominion that there should be an unlimited supply of whisky on the time-payment system while essential commodities are not obtainable. Incidentally, the whisky imported during the current six months is to be half paid for next year and the balance is due in 1945. When and how future supplies will be paid for is a matter for conjecture. This procedure, at the same time, calls attention to the fact that there arc many other lines being imported to-day which will have to be paid for out of future earnings and this position illustrates just how seriously the economy of the Dominion is out of balance and how vitally necessary it is that the problem should be tackled at its roots instead of merely postponing the day of reckoning.