EXCHANGE POSITION.

New Zealand Herald, Volume LXVIII, Issue 20989, 28 September 1931, Page 8

EXCHANGE POSITION.

CONCERN OF IMPORTERS.

CAirriON IN OPERATIONS.

WATCHING THE FUTURE. Although the optimism in Britain which has followed the departure from the gold standard is viewed with pleasure in New Zoaland, the noto of caution which has been sounded at Homo is reflected in the Dominion, importers of foreign goods particularly having adopted a policy of caution in view of tho uncertainties of the movements of exchange.

"At present we are all 'at sixes and sevens,' " said an importer of American and Canadian goods on Saturday. "The banks will not sell us dollars at any price, and although the English pound is worth about 3 dollars 89 cents in New York they will quote us only 3 dollars 50 cents foxhard cash, with the reservation that we shall make good any difference that might subsequently occur. Commodities on the Water. "The position is further complicated in the case of goods on the water. Those who were fortunate enough to have previously bought dollars at 4.85 to the pound have goods paid for with those credits on the same ships as similar goods on which only 3 dollars 50 cents, with reservations, are being allowed when payment has lo bo made on arrival. That is a largo margin of difference. In view of the obscure position we can only mark time." The belief that the exchange position as between New Zealand and London would gradually return to normal was expressed by another importer in a large way of business. He emphasised tho point that, in his opinion, tho movement would be a gradual one. "Some people," he said, "are advocating a rate of 20 per cent, in view of the benefit that would bo received by the exporters of primary produce, but such a policy carries with it a boomerang. If such a rate were adopted it would disorganise trade. "With regard to the exchange position generally, we are proceeding with extreme caution in tho matter of replenishing stocks. The effect of Britain's going off the gold standard will no doubt divert a lot of orders from foreign houses to British business firms, which is all to the good. No one likes to import foreign goods when British industries are languishing, but it is so often a matter of necessity to do so. It is little good appealing for support for British commodities when we arc handicapped by high exchange rates, high duties and primsge. Intentions of Otner Countries. "The cablegrams mention that there is a likelihood of other countries following Britain's lead, and of adopting the pound as a standard. It is rather difficult to know just what that will mean, and it is hard to reconcile that attitude with the lack of confidence which has brought about the present position. Foreign Governments saw the way tho Labour Government at Home was content to squander money and lost confidence in it accordingly. Surely they would not adopt so much paper as a standard ? "Already British industry is benefiting from the new conditions and the cotton trade has been quoted. If the movement continues Britain will be in a position to compete even on the American market, in spiteof the high tariffs there. It, is very pleasing to view these brighter prospects, but until the position has been clarified nothing but a very cautious attitude can be adopted with safety." The need of caution was emphasised similarly by a director of another large importing house. "Until we know more of the exchange position we are proceeding with care," he said. "The full effects of the developments in Britain have not yet become clear, and until we can get a view of the position we cannot act, with certainty, so that a cautious attitude is the only one we can adopt."