Maintenance Of Sterling Essential For World

Northern Advocate, 1 August 1949, Page 4

Maintenance Of Sterling Essential For World

WELLINGTON, Mon. (Sp.).—Plans for bridging the dollar gap were outlined by the Minister of Finance (Mr Nash) last mgh Mr Nash reached Auckland in the afternoon after attending the London financial talks. He said last night after reaching Wellington that the Government’s desire would be to avoid taking any action on imports which affected existing commitments, particularly those made under import licences which have already been granted.

The Minister said that among the many ideas discussed at the conference of Commonwealth Ministers of Finance for bringing about an accretion of dollars in the sterling area were: (1) Capital to be invested by dollar countries in sterling countries for development schemes and other purposes: (2) An increase in tourist traffic. He added that a fuller statement would be made to Parliament at the earliest convenient time. UNANIMOUS. Mr Nash said the Ministers at the conference were unanimous that the maintenance of the sterling area was essential not only for the constituent countries, but for the world as a whole. The sterling reserves had fallen to a dangerously low level. It was essential that this decline should be arrested and that steps should be taken to increase those reserves. This could be brought about in two major ways: (1) By reducing as far as practicable imports from hard currency areas.

vestment of dollars and the improvement of tourist traffic,’ said Mr Nash. “In so far as the development of greater exports to hard currency countries is concerned, it was arranged that there should be continuous consultations and exchanges of opinions among' the Commonwealth countries.” Mr Nash added that at no time during the conference was the statement bv the Chancellor of the Exchequer, Sir Stafford Crips, that there would be qo devaluation of sterling, questioned in any way. THE BUDGET The 1949 Budget was now “well on the way” and whether it would be ready to be presented in the House of Representatives on August 18 depended on how far advanced the Treasury was with its part of the work, said Mr Nash in Auckland. The Minister said he had done some work on it while he was travelling and the acting-Minister of Finance (Mr Nordmever) had also done some in Wellington. Although Britain was facing serious difficulties, she would overcome them, said Mr Nash when referring to the Finance Ministers’ conference .in London. There was no pessimism at the conference, but a feeling of optimism. It was not undue optimism, for it was realised that a way out of the difficulty had to be found. In reply to a question whether Britain's condition would affect New Zealand’s markets there, Mr Nash said the Dominion’s markets were fixed by contracts for the next six years, and could net be affected in that time. There seemed to be a feeling of calm 'confidence in the United States, said Mr Nash, when he was asked if he had noticed any signs of trade recession there. However, a superficial glance at the country could not tell him enough to form a definite opinion. I*LANE DELAYED For a quarter of an hour, the Dakota aircraft bringing Mr Nash from Auckland to Ohakea lost contact with the officials in the control tower at Ohakea.

(2) By increasing to the maximum the sale of commodities to hard currency areas. This would necessarily involve the development of the resources within the sterling area, continued Mr Nash. COST LEVEL. It would also require the production of goods at a cost level which would attract sales on a competitive basis in hard currency countries. Furthermore, the hard currency countries would require to facilitate the entry of goods by the reduction of tariffs or other means. “It is recognised that such development may take some time,” said the Minister. “While, therefore, the possibility of increasing exports to the dollar area and other hard currency countries is receiving immediate attention, it is desirable, if the present disequilibrium in payments between the sterling and hard currency areas and the consequent depletion of the sterling area reserves of dollars is to be arrested, that action should be taken at once to increase exports to hard currency areas and reduce the drain on the dollar resources.” New Zealand would play her part in the common interest, said Mr Nash. For some time past import licensing from dollar sources had been permitted only after careful examination of each individual application. This screening process would be applied even more rigorously for the immediate future. ESSENTIAL GOODS. Only goods which-could not be done without, in the interests of the economy of New Zealand, and goods which were not available from sterling sources, would be admitted. The reduction of imports would not. however, solve the ultimate problem, which could be only overcome when goods were freely imported by countries whose exports at present exceeded their imports. In answer to a question Mr Nash said that the proposed investment of capital by dollar countries in sterling areas would not cause a loss of sovreignty This would depend upon the terms agreed upon for such investment. “It is hoped that something may be achieved in duo course in both the in-

This caused some concern as the weather in the locality was rapidly deteriorating. The- homer beacon at one end of the field was also out of action. * Because of the weather the aircraft followed a route on the seaward side of Mt. Egmont in the interests of safety. The journey from Whenuapai took two and a-quarter hours instead of an estimated time of one and a half hours. A flare path which had been laid out in anticipation of a night landing—the first Mr Nash has made in New Zealand—had been burning from G.4a p.m. For most of the flight the plane flew over a heavy blanket of cloud at about 11,000 ft.