Air Mail And Exchange Rates

Northern Advocate, 27 July 1938, Page 5

Air Mail And Exchange Rates

Possible effects on local retailers of the new air mail arrangements being made between England and New Zealand are outlined in a circular letter received by clients of a London mercantile Arm with important connections in Now Zealand. “It has been announced that, the ‘all up’ system of mail carrying to Australia will be put into operation on July 28, and that mails to New Zealand will be carried by air to Australia and thence by ship (it is hoped that mails to New Zealand will be sent all the way by air commencing early next year),” the letter states. “During the transitional period, however, it looks as though the transit time for mails to New Zealand will bo just about cut in half, and you should receive letters 18 days or so after they are posted from here. This means to say that documents covering shipment will bo in your hands two or three weeks before the arrival of the goods.” The letter goes on to say that the company has discussed the matter with an Australian bank representative in London to discover whether it was proposed to adjust the exchange rate to meet the shorter transit time. “We are informed that the matter is still under discussion by the association of Australian and Now '’Zealand banks in London, but that, in the meantime, opinions have been sought from their clients in Australasia as to how besi to meet the position. The- Alleriuiiives.

“It would appear (hat there would be three alternatives: «a) To carry on as at present with or without an adjustment in the rate of exchange, in which case you would pay for your shipments two or three weeks before the arrival of the goods. If the exchange rate should be adjusted, additional. overdraft interest will cancel out any advantage which you receive from the adjustment of the exchange if you should happen normally to run an overdraft with the bank. (b > To draw drafts at two or three weeks after sight, in which case ad valorem stamp duty would be incurred, both English and New Zealand. The English stamp duty is at the rate of 1/per cent. <c) To instruct us to advise the banks to hold the documents until the arrival of the steamer. In this case an additional i per cent is added to the exchange for the withholding of presentation up to a maximum of j 30 days. j “The banks are uncertain as to j whether the arrangement detailed in paragraph <c) will be continued after the ’all up’ mails start, in view of the large number of clients whom they anticipate would wish to take ndvan- | (age of it. They fear that congestion | will take place when the steamers do | not arrive, and Huff they will he unS abli to accept the responsibility of :ul- ; vising clients and clearing documents { promptly on arrival of steamers." ! Staling that it wished In meet the j new conditions as economically as posj sihlc, the company concludes by ask- ■ ing clients wishing to adopt any other , procedure than that at present in force. ' to advise the company direct by cable t or air mail.