Our Foreign Exchange and Empire War Effort

Northern Advocate, 30 November 1939, Page 2

Our Foreign Exchange and Empire War Effort

[Special to “Northern Advocate”l WELLINGTON, This Day... “It has been said that for every 80 foreign cars we buy, Britain can buy one aeroplane less from America, every gallon of petrol we import may ultimately mean one gallon less for Britain or France.” This statement was made by the Minister for Finance (Mr Nash) in his broadcast address last night on the foreign exchange problem as it affected the Empire's war effort. After explaining the distinctions between primary and secondary belligerent countries under the revised American neutrality legislation, Mr Nash said it was not necessary for New Zealand to pay cash in the United States for ordinary American goods, before they were shipped.

Dollars Must be Found

The usual commercial terms applied, but it was essential that at some stage in the transaction American dollars be found for payment. At some length, he explained how these dollars were obtained. Apart from proceeds of British investments in America, the supply was limited by the amount of goods which the Empire could sell to the United States. New Zealand sold most of the goods she produced to Great Britain and used the proceeds to buy, firstly, British goods and, secondly, currencies other than sterling with which to purchase goods such as tea and petrol, which she could not obtain from Britain. “Buy N.Z. Goods.” New Zealand sold goods to various foreign countries, but often the balance was unfavourable, and to meet the deficiency it was necessary to draw on foreign exchange available in London.

At present, dollars were urgently needed for Britain’s war effort and to the extent that New Zealand called for them to pay for goods she was hindering the war’s prosecution. By buying New Zealand goods, Mr Nash said, Hie Dominion was helping to keep British industries going, particularly the export industries, which were of vital importance. The more goods Britain could sell to foreign countries, the more foreign funds she could obtain for war purposer. Our Duty. The duly of every New Zealander at present was, as far as possible, to buy goods made in New Zealand from New Zealand raw materials, and in the second place to transfer as many other purchases as possible to the United Kingdom. Such a policy would help Britain to obtain foreign goods which she urgently needed for the prosecution of | Ihe war, whereas the purchase of any | but necessary and irreplaceable foreign goods in New Zealand would have the opposite effect. ;