OVERSEAS TRADE.

New Zealand Herald, Volume LXVIII, Issue 20926, 16 July 1931, Page 8

OVERSEAS TRADE.

The devastating contraction in the value of the exportable commodities upon which the welfare of the Dominion depends is demonstrated by the returns for the 12 months ended June 30, during which probably the whole of the season's production has been exported, together with part of the previous season's output. The valuation of £37,000,000 is the lowest for many years and compares very unfavourably with the average for the preceding decade, which was just over £50,000,000. Thus, if the value of exports is accepted , as an approximate measure of the national income,'the year's returns indicate a contraction of over one-fourth from the average level for the ten years before the acute phase of the depression. This is perhaps a conservative statement of the effect upon the Dominion ; it is certainly not an exaggeration. There is, however, one gratifying element in the statistics, the drastic curtailment of imports, the value of which is much lower than in any year since 1921-22. The latter, with its total of less than £31,000,000, was extraordinary, as that figure'represents the sequel to the post-war slump as a result of which imports valued at £65,500,000 were received in New Zealand. Thus, in spite of the low value of exports, there is an apparent favourable balance of

over £3,500,000, so. that efforts to restore equilibrium in overseas trade have already achieved a substantial result. The detailed statistic? published in another column show that the aggregate value of trade in the last five years has been almost equal to that of the preceding five years, the favourable balance for the second period having been only £1,630,000 less than that for the first half. Thus neither the trade returns nor the banking statistics, as was observed last week, reveal any justification for the abnormal rates of exchange prescribed by the associated banks. From 1921-22 to 1924-25 the Dominion's exports exceeded imports by nearly £31,000,000, and in the two following years,' adverse balances totalling nearly £7,000,000 were sustained with only a slight rise in • exchange rates. - In 1C27-28 and 1928-29, the "excess of exports was nearly £22,000,000. The next year showed an excess of imports of £1,240,000, which was piohably an under-statement, but the real amount conld not have been many millions. This has been immediately followed by a substantial favourable balance, 1 to which the returns for every month since last August have contributed. Yet exchange rates have been raised to and maintained at a level which is unprecedented in the history of either sew Zealand or Australia. The supplementary tariff of 10 per cent, has no doubt checked importations, but it has increased the cost of essential goods and prevented the reduction of prices which is imperative to the restoration of internal equilibrium. The sumptuary influence of the exchange is no longer necessary, the temporary advantages of its premium on exports have by now been exhausted, and since the principle of independence of Australia has been established, serious consideration should be given to the possibility of moderating the rates.