King Country Chronicle. Monday, July 31, 1939. WHITHER?

King Country Chronicle, Volume XXXIII, Issue 4817, 31 July 1939, Page 4

King Country Chronicle. Monday, July 31, 1939. WHITHER?

Just what is to be the outcome of Mr. Nash's financial negotiations in London remains obscure, but it appears that this Dominion is committed with heavy loan and credit repayments until 1945. The conversion of the £17,000,000 loan has undoubtedly been at a remarkably good rate of interest—so good that it appears that the British Government must be helping this Dominion—but the ability of New Zealand to embark on the series of loan repayments with the present internal conditions prevailing must be doubted. The terms are that a million sterling is to be redeemed at the date that the loan falls due; that a further two million sterling must be paid in 1940; and three and a half million sterling in each of the four following years; so that by 1945 the loan will be paid off. The redeeming of this sum by 1945 would markedly benefit the finances of this Dominion, but the cost must be counted. At present the Reserve Bank estimates that we require in New Zealand currency £12,000,000 to meet our interest and similar payments; Mr. Nash hopes that we will pay the export credits amounting in New Zealand currency to £5,000,000; and there will be the commitment of £1,250,000 redemption on maturity of the loan plus £2,500,000, repayment of first instalment. Even as seems inevitable the repayment of the export credit is extended, and no provision is made for the repayment of the credit for armament purchases, the remaining total of £15,750,000 is probably more than New Zealand can reasonably be expected to meet when internal extravagances have driven the 1939 excess of exports over imports down to the exceedingly low figure of £3,500,000 New Zealand currency. Will import restrictions be sufficient to bring about the result required, and yet maintain the present standards of expenditure in New Zealand? Especially after the assurances that Mr. Nash has given the British Government, there can not be the slightest hope of this, though those import restrictions as have been imposed have caused internal unsettlement. A policy which is wildly extravagant internally, yet strictly frugal externally, is bound to end in dismal failure. Also, because we have the highest export trade per capita of any country of the world, it follows that in no country could the repercussions likely to follow be more disastrous than to New Zeaalnd.