DOMINION’S EXPORTS

Gisborne Times, Volume LXXXIV, Issue 12887, 13 June 1936, Page 10

DOMINION’S EXPORTS

EFFECTS OF MARKETING PLAN. TRADING BANKS’ EXCHANGE NEEDS. WOULD REQUIRE TO BE BOUGHT FROM RESERVE BANK (Special to the Times.) WELLINGTON, June 12. How the new Government’s legislation will affect the trading banks was alluded to by Sir G. Elliot at the annual meeting cf the Bank of New Zealand to-day. He said:— “For instance, they are to lose fiom August .1 next the handling of the exports of dairy produce, and should wool and meat come under the Government’s guaranteed price and marketing scheme, the effect would be that the banks would be entirely deprived of the normal means of replenishment of their London funds and would have to purchase all their exchange requirements from the Reserve Bank of New Zealand. t need hardly say that the Government’s proposals in this direction will seriously affect an important branch of the trading banks’ business, a business they have developed and carried on since the earliest days of hanking in New Zealand/’ Touching on the Primary Products Marketing Act, Sir G. Elliot said it was a measure to make better provision for the marketing of dairy produco and other primary products so as to ensure for producers an adequate remuneration for the services rendered by them to the community/’ “The preamble,” he continued, “states that it is considered essential in the public interest that producers of pirimary products should, as far as possible, be protected from the effect of fluctuations in the market prices thereof, and it. is thought that the most effective and appropriate way o l affording such protection, so far as 1 elates to primary products intended for export, is to provide that the Government shall acquire the ownership of such products at prices to be fixed and promulgated from time to time.

“A Department of State, called the Primary Products Marketing Department, under control of the Minister of Marketing, is to be established to administer the Act. The principal functions of the department are to make all necessary arrangements with respect to—-

“(a) The acquisition by the Crown of any primary products in accordance with this Act or in accordance with any other lawful authority that may hereafter be conferred.

“(b) The marketing, in New Zealand or overseas, of primary products, whether or not such products liavo been acquired on behalf of the Crown.

“The Act provides that no contract for the carriage by sea of any primary products intended for export shall be made save by the Minister or in conformity with conditions approved by the Minister. “Dairy produce will he the first o' New Zealand's primary products tc he marketed under the new Act. A fter August 1 next all dairy produce intended for shipment will, as soon a? placed on board any ship for export, become ihe property of the Crown which will make payment therefor at prices fixed from time to time by Order-in-Council. To enable theso payments to be made, an overdraft will be gianted by the Reserve Bank on an account to styled ‘The Dairy Industry Account.’ Proceeds of the produce, as it is sold, will be credited to this account, and if the amount realised is less than the guaranteed prices paid to the producers, tho loss will be borne by the Government.

“The Act provides that for produce exported on or before 31st July. 11*07. flic price shall he fixed after taking into consideration the prices received in New Zealand during a period of fiom eight to ten years prior to 31st July, 1933. After 31st July, 1937. several other factors arc to he taken into consideration in fixing prices. Provision is made in idle Act tlnvt tlio Minister may control tlie marketing and fix prices of dairy produce intended for consumption within New Zealand. This is a brief outline of some of the main provisions of the Primary Products Marketing Act. “Tho Hon. W. Nash. Minister of Finance, who is also Minister of Marketing, is hopeful of securing a market for all New Zealand’s surplus dairy produce by reciprocal agreements with Britain and other countries. Ho is shortly to proceed to London with this object in view, and his efforts to expand New Zealand's markets will most certainly have the sympathetic support and goodwill of the public, “Ono effect of the measure will be that, as from Ist August next, . the financing of all dairy produce exported from New Zealand will be undertaken by the Reserve Bank of New Zealand on behalf of the N.Z. Government instead of by the Trading Banks on account of the Dairy Companies as in tho past. . The Trading banks have played an .important part in financing and developing the dairy industry from the inception of . the co-operative scheme in New Zealand, and it is not too much to say that but for the assistance given by the banks, tho dairy factories as a whole would not be in the flourishing position they are to-day. “In view of the services rendered to the dairy industry, it. is to be regretted that the Government, in framing its proposals, has decided' to take away from the trading banks, an important portion of dairy produce finance which in the past has been handled by them with satisfaction a.nd at. a modest profit. The loss of the London exchange in connection with exports of this produce will make .unprofitable the working, of. some, of our branches, the existence of which lias only been justified because of dairy factory connections.”, „