DETAILS SOUGHT

New Zealand Herald, Volume LXXIV, Issue 22852, 6 October 1937, Page 15

DETAILS SOUGHT

OPPOSITION QUERIES ALLOCATING THE CREDITS VALUATION OF REICHSMARK [BY TELF.GRAPH SPKIIAT, RKPOIITF.It 1 WfjLLJXGT()X, Tuesday Details of tile financial arrangement: which are likely to apply to tin new trade agreement between New Zea land and Germany were sought, by Op position members when the Minister 01 Finance, the Hon. W. Nash. . was introducing the customs resolution on thf subject in the House of Representatives to-night. The introduction of tlu necessary resolution was the signal foi a lengthy and involved discussion. Mr. Nash said Germany was tlir most likely country outside the Empire to take the goods of New Zealand on a reciprocal basis. During the foui days he had spent in Berlin he had been treated with nothing but the greatest courtesy, and he had come to the opinion that there were now botter hopes of reasonable relations between Germany and other countries oi the world than there had been foi some time. "After having ascertained from the German representatives what commodities they would like to trade with us,' 1 Mr. Nash continued, "I approached the United Kingdom Minister concerned to see whether lie had any objection tc the concessions it was proposed to make. I was informed that there was not the slightest objection, and when [>ur representatives met members of the Board of Trade, a similar answer was received. In fact they were told that the board was anxious for agreements of that kind to be made. We then cabled to New Zealand to see whether any ill-effects wero likely, and were assured that everything was all right. In Accord with Policy The main purpose of the agreement was entirely in accord with the policj the Government had enunciated of reciprocal expansion of trade betweer New Zealand and other The general principle was that all credit? that were built up in New Zealand bj the sale of goods manufactured in Germany must be used by the German Government for the purchase of goods manufactured in New Zealand. The purchase of };o<hls from Germany was to precede the purchase of goods b\ Germany. If that procedure had beer in operation for the last 8} years, New Zealand would have sold to Germain £1,100,000 worth of goods more that had actually been sold. The goods purchased from New Zealand by: Germany in recent years hat been principally wool, hides, and skins and for wool there was mainly a work market. "1 be purpose we had in mind," the Minister continued, "was that froir the credits Germany had here it should buy wool, butter and apples, but mostly wool. Germany has agreed that if the credits built up by the sale ol German goods here 25 per cent of the first £400.000 shall be used for the purchase from us of butter, together vith 50 per cent of anything in excess >f £400,000." Credits to Purchase Apples

"The second point," Mr. Nash said, "is that 5 per cent of the first £400,000 worth of credits created must be spent in the purchase of apples from .New Zealand, while to the extent that that figure is exceeded 20 per cent must spent on apples, with a limit of £60,000 in any one year. We may substitute 5 per cent of pears." Arrangements had been made that after the provisions with respect to butter and apples had been complied with Germany could use the balance of its credits for the purchase of any commodities produced in New Zealand, the Minister continued. The price at which Germany was to buy New Zealand butter was the London' parity at the time of purchase, and Germany was to go on to the London market during the three months of the year when New Zealand's supplies were in major quantity there, thus tending to relieve large quantities. The Cei" man Government was not a buyer of fruit, but would issue certificates to its dealers for the purchase of fruit as provided for in the agreement. Mr. FT. S. S. Kyle (Opposition—Hiccarton): YVhat do we take from German y ?

Mr. Nash: Anything at all. _Mr. Nasfi said if it was possible for New Zealand to extend its trade relations with Germany and other countries, that was all to the good. Everything possible would be done to satisfy the needs of the United Kingdom first. I lie Government was of opinion that there was still a big market in the United Kingdom for our butter, cheese and other products if the needs of the people in Great Britain were to be fulfilled. Step For Better Relations

The world was a unit, said Mr. Nash, and it was necessary to find a way to bring about decent relationships between countries. In making an agreement with Germany, the New Zealand Government was taking a step in that direction. Germany was the greatest consumer of butter in Kurope outside the United Kingdom, hut, Now Zealand did not send a single pound of that commodity there. New Zealand should be able to get some of that trade.

"There is not a shadow of restriction in the agreement," said the Minister. "Everything is directed to reciprocal expansion."

Information as to the method adopted in valuing the reichsmnrk for the purpose of levying duty was sought bv the l?t. Hon. J. (J. Goat.es (Opposition—Kaipara). After pointing out that the existing value of the reichsniark was 12.31 to the pound sterling. Mr. Coates said it had been represented

to him that the negotiations had been

carried out on the basis that the rate

was 20.16 to (lie pound, if that was the position, then the Minister owed

an explanation to the House. Ho also risked if the value of the reichsmark was to be taken as at the date of ex-

port from Germany

"There is nothing in the agreement as to the value of the mark," said Mr. Nash, .lust as Canada had proceeded with the valuation of the ninrk as compared with the dollar when an agreement was made between Germany and Canada, added the I\linistor, so Now Zealand had arranged to look into the value of the mark as compared with the pound The arrangement between Canada and Germany was that Canada should weight the valu« of the reichsniark as compared with the dollar, and the New Zealand Government intended to do likewise. "We will iletermino the value ol the German mark along with the New Zealand pouncl and the pound sterling a* nearly us possible," said .Mr. Nash

"and in doing that we will not interfere with the preference given to Great Britain. We will give consideration to the value of the reiclismark just as the Canadian Government did."

Mr. W A. Bodkin (Opposition— Otago Central) said he was in favour of an expansion of international trade, but the impression be had formed of tin* Minister's proposal was that it was definitely in lavour of Germany. New Zealand had to make the first move by establishing credits for Germany in the Dominion.

Mr. \\ . .1. Poison (Opposition— Stratford) said Germany might become a substantial buyer of New Zealand butter, but it was questionable how long she would remain in the market. The Minister was merely substituting one market for another. The House had been told by the Minister himself that Great Britain could consume all the butter New Zealand could produce. The Minister of Labour, the Hon. H. T. Armstrong, said the Opposition was complaining because the Minister had succeeded where it had failed. The previous Government did nothing but talk about opening up trade with China-and Japan. The present Government believed that if New Zealand butter was good for the Chinese and Japanese it was equally good for the Germans. The Minister was to be congratulated on the businesslike arrangement lie had made with Germany. Mr. S. G. Smith (Opposition—New Plymouth) said it had been jinnounced over the air that in a few days' time Germany intended to renew the demand for the return of her former colonies. The agreement might not amount to anything. One did not know how long the Government in Germany was going to remain in office. Air. J. Hargest (Opposition—Awarua) said he would like the Minister to inform the House whether a similar agreement with Germany was rejected by the Australian Government in February, 1936.

Is PAST RELATIONS 0 y GERMANY'S GAIN n iV V A RECENT IMPROVEMENT u : PURCHASES OF WOOL d J For the past two years New* Zealand has had a large unfavourable e trade balance with Germany. In the !j current year, however, owing to Gert many's larger purchases of wool at the t enhanced values ruling, the pendulum f has swung the other way and for the 3 seven months exports to Germany 3 have exceeded imports by over £200,000. Figures for recent years show that imports from Germany have expanded since the low point was reached in 1933 and the total for 1936 was ] easily the highest recorded, s Exports and Imports t New Zealand trade with Germany • since 1931, expressed in Now Zealand f currency, compares as follows: — Exports Imports Balance £ £ £ : 1031 . .. 309,847 449,915 -139,168 . 1932 . .. 289,917 1 19,795 -129,878 1933 . .. 376,880 350,094 +25,892 1 1931 . .. 944,319 .-57* >,595 +567,715 ! 1935 . .. 195,391 499,851 -.30-1,550 - 193(1 . .. 272,1 SI 972,141 -399,663 1937 (7 mths.) 680,176 410,192 +233,684 German buying at the Xew Zealand wool sales last season gave appreciable assistance to the market and her operations were more extensive than in the previous season. In spite of the fact that imports of wool into Germany for ]936 were at their lowest point of recent years her purchases of New Zealand wool were 7.600.0001b., as against 5,400,0001b. in 1935. Trade in Butter Although second only to Great Britain as an importer of butter, Germany has taken smaller quantities from the world market since 1929. Imports increased between 1934 and 1935 and again early in 1936 when her buying greatly benefited the Danish market. The demand is said to have arisen not from a decrease in production in Germany, but from a shortage of edible fats. German buying, however, has been only an indirect influence on the market so far as New Zealand is concerned. Other items in which New Zealand has carried on trade with Germany in recent years, in addition to wool, are I tallow, hides and skins, sausage casings, apples, seeds and kauri gum. New Zealand buys a wide range of Germany's manufactured goods. The values of the main commodities imported since 1935 compare as follows: — ■ 1937 1936 1935 (Six months) Paper . . i.-_' 7,857 X' 59.037 £42,774 Apparel .. 22,659 55,582 46,911 Silk goods .. 31,903 42,414 25,079 Hardware . . 10,229 21,035 19,160 Klec. appliances 21.314 29,572 10,147 Glassware . . 6,935 20,815 10,41^) Drapery 7.486 16,806 10,419 Artificers' tools . 10,999 19.509 14,115 Fancy poods 4,359 15.114 12,861 Agreement With Canada A trade agreement between Germany ' and Canada was concluded last October, 1 and is based upon reciprocal most- j favoured-nation treatment in customs | , matters, with the exceptions that i neither party is entitled to share in j the privileges which may be accorded j by one or the other to ft third party j • by virtue of a. Customs Union, and j that Germany may not claim any of! the privileges accorded by Canada to j < countries of the British Kmpire. tiach j i country agreed to give due considera-1 ( tion to the other in the event of its! prohibiting the import or export of j 1 goods. j (