Grave Danger of Default

Manawatu Times, Volume 64, Issue 153, 1 July 1939, Page 5

Grave Danger of Default

New Zealand’s London Balances Low

DIFFICULTIES OF OWN MAKING

United Press Association.—By Electric Telegraph.—Copyrigh t. t OXDOX. .Time 29. The Daily Mail’s City editor understands that New Zealand’s! London balances are now so low that there is grave danger of commercial default within three weeks unless something is done to prevent it. New Zealand importers having to meet payments for goods from Britain which have already arrived in New Zealand, adds the article, will be forced to pay in New Zealand pounds. This is a serious matter for exporters from Britain and would mean a further fall in New Zealand currency. Mr Nash would be severely handicapped in his task of converting the debt by such a blow to New Zealand credit if it is not possible to evolve a method whereby the regular financing of imports can be continued pend- | ing an adjustment of tA>U«. I Lord Balfour of Burleigh, presiding j at the annual meeting of the National | Bank of New Zealand, said that hopes that exchange control would repair the inroads that had been made into New Zealand’s sterling balances had been disappointed, partly owing to substantial imports for secondary industries and partly owing to the fact that capital transfers had been permitted to continue on an unexpected scale, which had added materially to the difficulties of those requiring sterling. The Government, said Lord Balfour, should immediately take the responsibility of laying down priorities to ensure that the volume of import licences was kept within the limit of available sterling. “New Zealand’s credit,” he said, “cannot be maintained if ordinary trading operations cannot be engaged in with confidence.” Referring to Mr. Nash's task, he said: “Though the moment is not propitious for fresh borrowing, I have no doubt that Mr. Nash’s request for a defence lean will be sympathetically considered. There is also an urgent necessity for fresh money to finance imports if serious dislocation of trade amounting to commercial default is to be avoided. “I earnestly hope that, whatever the wisdom or folly of the Government’s policy, those who are negotiating with him will remember that sympathy and generosity will do more than rescue the Government from difficulties which are largely of its own making—they will save further losses and unemployment in British firms exporting to New Zealand, and provide security for the needs of the British investor.” MR. NASH TO SEE KING LEAVES LONDON FOR DUBLIN SOON LONDON, June 29. The New Zealand Minister of Finance, Mr. Nash, visited Kidderminster and Birmingham and conferred with manufacturers. He saw the Dominion's Secretary, Sir Thomas Inskip, to-day. His Majesty the King will receive Mr. Nash this evening, after which he will be the guest at an international affairs dinner. Mr. Nash will visit the potteries at Stafford to-morrow thence will go to Dublin. NOTHING TO SAY TRADING BANKS FULLY UNDERSTOOD DIFFICULTIES Per Press Association. WELLINGTON, June SO. When the London cable suggesting a danger of New Zealand defaulting in debt services was submitted to Mr R. C. Addison, chairman of the Associated Banks, for any comment he might make upon it, he said that he did not wish to do so at present. He remarked that the trading banks fully understood the various difficulties of the present situation but he had nothing further to say than that.