BATES OF EXCHANGE.

New Zealand Herald, Volume LVI, Issue 17295, 20 October 1919, Page 9

BATES OF EXCHANGE.

NEW CUSTOMS PROPOSAL.

VARYING VALUES SYSTEM.

k SUGGESTED ALTERNATIVE. * Some remarks regarding the rat© of exchange on America and the proposed new method of the collection of Customs duties ■were made yesterday by Mr. J. Hooton, of VFill-ngton. general man;, s of the .Farmers' Co-operative Wholesale Federation (X.Z.), Ltd., who is now visiting Auckland. The new Customs regulation, recently announced, to become effective on November 1. proposed that the rate of evhanjie on foreign goods, for Customs purposes, should be that in force at the time the goods were exported. Last week, however, notification was received that the operation of the new regulation had been d.- erred until February I next. Mr. Hooton said that this 'postponement had been due to representations made to the Customs Department by himself and others. He had pointed out that in manv «3sea goods, for which orders had been, pla-oed in America, had been sold and resold to arrive at fixed prices, and had submitted that therefore such imports, in good faith, should be free from any extra imposition of duty. Mr. Hooton said that he was urging ♦ hat the regulation .should be not merely postponed, but cancelled. He had ascertained that though the Commonwealth Customs Department had made an altera--11011 in it* rate to about 4.75 in May, 1918, it had three months later restored "it to 4 86, admitting a contention by importers that the alteration was unfair because the gold standard was recognised to be 4.86. Upon the first notification of the proposed . regulation, said Mr. Hooton. he communicated by cablegram with America *<-> ascertain the rate of conversion applying to a shipment of goods by the steamer C'.ty of Madras, which left New York for Auckland and other New Zealand port* on September 23. Th* reply, received on Saturday, stated that the rate was 16. As this steamer would arrive before February 1 the goods would be lid mitt-ad on the standard basis of 4.85. Suggestion to the Department. Mr. Hooton said he bad submitted to Hie Customs authorities a formal objection t<> the proposal to levy duty on values worked out at the actual rate of conver- ; sion, on the ground that it would involve j considerable trouble and expense in regard j to every shipment owing to the fact; that : in most instances the steamers arrived be- j fore the shipping documents, and in nearly j every case the invoices came to hand be- j fore the advice of the rate of conversion. An enormous amount of work would be thrown upon the Customs Department and importers and Customs agents if the proposal were He instanced the fact that he had received drafts of different dates in respect to goods shipped by the Lorain negotiated at four different rates of exchange from 4.55 down to 4.14 i. From this it would be realised what extra work the proposed system would entaiL He had suggested to the Comptroller that » fixed rate should be adopted for a period of, say, three or six months, and that jt et the end of the period the rate approximated to the average actual rate for the time in question it should be continued, but that if, on the other band, it was found to be appreciably in favour or against the Customs Department a different fixed rate for a farther period, ■which would offset the discrepancy, should be adopted. These representations appeared to appeal to the Comptroller, and Mr. Hooton said he thought that if the regulation became operative they would be adopted. Interests of British Manufacturers. It had been stated, continued Mr. Hooton. that the object of the new regulation, apart from that of revenue, was to protect the British manufacturers. So far, however, as he had been able to ascertain, tlie British manufacturers had no wish at present to cater for oversea trade, and, moreover, their prices for many lines were double those ruling before the war. In toe second place, they were now heavily protected by the depreciation of the £ sterling in the American money market to the extent of about 15 per cent, as compared with the rate of exchange ruling in May, 1918. There was also the preferential tariff, to the extent of 10 per cent. ad valorem, operating in favour of the British article as against American goods. This protection had driven trade from America ti> Britain in a few isolated lines, but not to an extent that would make any appreciable difference to the balance of trade, which for some time must continue to be in favour of America. The difference in duty based on the rate of conversion on a shipment by the steamer which left New York on September 23 would. Mr. Hooton remarked, bo roughly 15 per cent., as compared with the standard rate. The manufacturers' increased rost of production also had to be taken into account, and when everything, iiielndintr the proposed impost of 15 per cent additional duty, was considered, it would mean that the cost of American pood? subject to ad valorem duties would be raiM.J by ;t least 60 per cent.