RISE IN IMPORTS

New Zealand Herald, Volume LXXV, Issue 23061, 11 June 1938, Page 17

RISE IN IMPORTS

A BANKER'S APPEAL

COMMON SENSE NEEDED f; TRADERS* RESPONSIBILITY [by telegraph—OWN" correspondent] WELLINGTON, Friday An appeal to the common sense and good judgment of business men to reduce the ill-effects of fluctuations in export prices was made by the chariman of the Bank of New Zealand, Mr. A. T. Donnelly, at the bank's annual meeting to-day, in the course of a brief trade review.

"During the year trade conditions generally have been active, although there was a period when retail stocks were moving more slowly than imports, leading to considerable overstocking," Mr. Donnelly said. "Public revenue has been buoyant, and the Minister of Finance has announced a surplus of £BIO,OOO for the past financial year, as compared with £472,000 for the previous year. The total revenue for the year amounted to £36,059,000, being an increase of £4,912,000 over 1937. The sources of revenue chiefly contributing to this increase were income tax, which rose from £6,619,000 to £9,079,000; customs duties, which rose from £9,499,000 to £10,759,000; and sales tax, which rose from £3,044,000 to £3.499,000. Expanded Imports

"While exports in the past year have increased by £4,800,000, imports have risen by £10,500,000. The relatively greater increase in the value of imports illustrates the well-established fact that high or over-importation is the normal corollary of high export prices. Once a favourable export season is established and accepted by the business community, the tendency is to place heavy overseas orders which may prove to be excessive at the time of arrival. Such a tendency has been in operation this year and was anticipated in the last report placed before you. ''l would again draw your attention to the trade dislocations that result from the excessive optimism generated by high export prices as well as by the excessive pessimism generated by low export prices. The common sense and good judgment of business men are of particular importance in a country in which external trade plays so important a part as in New Zealand. "These over-large importations have been the principal cause in the decline in New Zealand's London funds. The position with regard to imports should, as on previous occasions, soon adjust itself. Moreover, the proceeds of a considerable portion of the Dominion's produce are, of course, received after March 31."

Specialised Exports

To show how highly specialised were New Zealand's exports as to number and destination, Mr. Donnelly mentioned that in the financial year 193738 dairy produce, meat and wool accounted for £54,300,000 out of a total export value of £65,000,000. _Of these commodities, wool alone had important outlets beyond the United Kingdom. Imports were much more diversified as to number of items and sources of supplv. The largest value-group comprised motor vehicles, motor spirit and associated imports, which accounted for £9.500.000 out of a total of £58,000,000. The value of imports in this group had markedly increased in the past 12 months. *