New Zealand’s Credit

Manawatu Times, Volume 63, Issue 165, 15 July 1938, Page 5

New Zealand’s Credit

Lavish Government Expenditure Blamed FINANCIAL PAPERS REPLY TO MB. SAVAGE United Press Association.—By Electrlo Telegraph.—Copyright. Received Thursday, Midnight. LONDON, July 14. “Unless steps are taken to preserve New Zealand’s financial status, it seems that the initiative must come from the hanks,” says the Financial News. ‘ ‘Mr. Savage is apparently not worried over the fall of sterling balances in London. “The position would not be so bad if there was real support for Mr. Savage’s contention that the London funds are being used up to make up the arrears in New Zealand’s purchases of capital equipment. Unfortunately the trade figures show that tho increased imports are mainly foreign motorcart. There is no doubt that the lavish Government expenditure is at the root of the problem and it is high time Cabinet removed tbe present threat to New Zealand’s stability.” Facts Twisted by Enemies of Government MR. SAVAGE’S COMMENT Per Press Association. WELLINGTON, Last Night. When the London cable message regarding rumours of an embargo on remittances from New Zealand was referred to the Prime Minister, Rt. Hon. M. J. Savage, he said that the policy which provided for the open sale of sterling by the Reserve Bank at a standard rate had not been changed, and there had never been any suggestion of either a change of policy or an embargo on tho purchase of sterling funds. “I am also advised,” said Mr. Savage, “that the trading banks on their part are merely following the normal course of conserving as far as possible for the ordinary requirements of their customers their overseas funds, which have been considerably depleted during the last two years, mainly by tho exceptionally heavy imports which have taken place. The difficulty of the Government is that every step taken by the banks or by the Government is twisted by the enemies of the Government for the purpose of politically tindermining tho Government and the credit of the country.”