CONTROL OF IMPORTS AND EXPORTS

Nelson Evening Mail, Volume LXXII, 7 December 1938, Page 3

CONTROL OF IMPORTS AND EXPORTS

STATUTORY OBLIGATIONS OF RESERVE BANK SUSPENDED NO LONGER REQUIRED TO GIVE STERLING FOR BANKNOTES INTERNAL LOAN FOR CAPITAL EXPENDITURE ON PUBLIC WORKS I he control of imports and the licensing of exports as from to-day is provided for in regulations published in a “Gazette” issued last evening. The “Gazette” also contains a notice by the Minister of Finance suspending the statutory obligation of the Reserve Bank to give sterling for its banknotes. This action has been taken to enable control to be exercised over the sterling funds of the Dominion. A statement explaining the regulations and the reasons for the action taken was issued by the Minister of Finance, Mr Nash. After referring to the drain on sterling funds, he said a stage had been reached when the Government deemed it necessary for the general welfare of New Zealand to take steps to conserve these funds so as to ensure that overseas debt services would be met and that sufficient funds would be available for essential imports. Fie said that every possible facility would be provided for preference to the United Kingdom in the purchase of capital i equipment and raw materials for the extension of manufacture within the Dominion, and for the import of commodities not provided by New Zealand manufacturers. Mr Nash also announced that within a reasonable time after the necessary arrangements had been made the Government proposed to issue an internal loan to meet public works capital expenditure. The regulations dealing with imports and exports are in the form of two separate Orders-in-Council. One is known as the Import Control Regulations and the other as the Export Licenses Regulations.

Mr Nash said that the export licenses regulations were not for the j purpose of restricting exports, but to, obtain control of the sterling credits arising from the sale of exports. The ! imDort control regulations were dc- j signed to give the Government control over the demands upon the sterling funds of the Dominion for imports The suspension of the statutory ' right of obtaining sterling funds from the Reserve Bank was a necessary corollary of the import control regulations and necessary for generally conserving the funds for use In the best interest.- °f the Dominion as a u hole. The continued tall In the amount of sterling funds had been the subject of general comment among the business community and recently frequent references to the matter had appeared in the newspapers. Thus, the public generally were aware of the necessity of i taking some action to meet the situ- , at ion that had arisen I

11 NET OVERSEAS ASSETS > “For October, being the last month , i for which complete returns are avail- > j able.” said the Minister, “the net over- . seas assets of the Reserve Bank and . !the trading banks amounted to > 1 £11.856.000 compared with £28.024.000 . j for the same month of last year. The .! principal cause of the fall in the funds , is to be found in the trade figures. , ! which show a substantial decline in the . | value of exports with relatively little . j fall in the value of imports. In New , 1 Zealand currency the comparative fig- , I ures for the ten months ended 2.lst Oc- ; tuber are as follows: f ; Excess Exports. Imports, of exports. £ £ £ ' I 1937 ... 58.187.000 46.605.000 11.582,000 j ! 1838 . 50.262.000 45.874.000 4.388.000 ;j Dec. £7.925.000 £731.000 £7.194.000 • I “The resulting drain on sterling 1 funds,” said Mr Nash, “was accentu-

ated by transfers of capital from New ] Zealand for investment overseas, and a ! stage had been reached when the Gov- j eminent deems it necessary for the gen- j eral welfare of New Zealand to take j steps to conserve sterling funds to ensure that overseas debt services will be met and that sullicient funds will be |

i available for essential imports. Alter •careful consideration of the whole I problem in all its ramifications, the I Government has reached the conclusion I that the best way of dealing with it G to take control of the sterling funds j and co-ordinate the use of them with ! their proposals for increasing the production of consumable commodities in 1 New Zealand Only by doing this can i the standard of living of the people be maintained.” REG l LA HON S EXPLAIN EI) An explanation of the regulations j was given by Mr Nash. Dealing with its export licenses regulations, he said the essence of these regulations was that a license was required before j goods could be exported. The main I consideration for the issue of such license was that the exporter must i undertake that the foreign credits |! arising from the sale of such exports | would be sold to one of the trading banks in exchange for New Zealand | The licenses were issued under three categories—particular license, general license, and purchaser’s license 1 "As the title implied, the particular i license was intended to apply to occasional shipments; the general license I would be issued to exporters who made ! frequent shipments abroad, and the purchaser's license covered those cases ( where goods had been purchased for 'export in New Zealand by means of 'credits made available in the Doj minion from overseas, j “To achieve the purpose ol the regu- , ! lations. o condition of the license in: ' respect of goods exported under a par- : i ticular or general license was that on the sale of goods to be paid to the over- | i seas branch or agent of his local bank The latter was required, in turn, to ar- j j range for such proceeds to be paid by j j its overseas branch or agent to the Re- 1 | Bank or its agent Authority I i was given to the Reserve Bank, at its discretion, to permit the local bank to dispose of the proceeds otherwise than lin accordance with the above requirej ments. “In return for receipt by it of any j such proceeds (or foreign credit) the I Reserve Bank was required to pay to !the local bank an amount in New Zealand currency equal to such foreign credit converted at a rate not less than the then current rate of exchange. Such amount was held by the local bank to the credit and disposal of the exporter. "When goods are exported under a purchaser’s license a condition to be i complied with is that there shall be j paid to the Reserve Bank, or its agent an amount of foreign credit equal in t value, at the current rate of exchange. ; to the credit or currency made availi able and used in New Zealand in the [purchase of goods,” said Mr Nash, j "The Reserve Bank is required to pay Ito the order of the local bank or the : person from whom the foreign credit jis received an amount in New Zealand currency equal to the foreign cur- ! rency. "General licenses will be issued by the Comptroller of Customs and particular and purchaser’s licenses by Col- | iectors of Customs. Goods intended \ for use as ships’ stores and small parcels sent by post will not require a license unless the Minister so determines in respect of any goods or classes of goods.'