BANK DRAFTS

New Zealand Herald, Volume LXXV, Issue 23215, 8 December 1938, Page 17

BANK DRAFTS

TEMPORARY SUSPENSION SETTLING NEW PROCEDURE OPERATIONS IN EXCHANGE Pending the establishment of a routine under the import control regulations the sale of drafts for funds overseas was suspended by the banks in Auckland yesterday. The interruption of business was regarded as merely temporary while the new procedure between the banks and the authorities is initiated. Once the new machinery is in operation business will be resumed, probably to-day. The view that the move by the Government was a necessary step in the interests of the country was expressed by a financial authority. The control of imports and exports was a very good scheme, but it had the disadvantage of placing too much authority in the hands 'of customs officials. "If people will only face the present problems from a national point of view, instead of being concerned with the personal standpoint, the position can easily bo adjusted," he added. "All that really is required is a little co-operation." Dealing with the effects of the Government scheme on the outside exchange market, the authority stated that exporters of meat and gold had acted to some extent on these lines, but this would be stopped as all transactions would now have to go through the trading banks, with the liltimate destination of the Reserve Bank. With the diversion of these funds into the hands of the banks and some limitation of the flow of imports, sterling exchange should quickly accumulate as the export season progressed, particularly if current prices are maintained.

VALUE OF £1 ABROAD REMARKS BY MR. A. G. LUNN PRIME MINISTER'S REPLY [BY TELEGKArn —FRKSS ASSOCIATION 3 WELLINGTON, Wednesday .Remarks made by the immediate past president of tho Associated Chambers of Commerce, Mr. A. G. Lunn, to the effect that the New Zealand £1 note was valueless outside tho Dominion were criticised by the Prime Minister, Mr. Savage, in an interview this evening. The reduction in the value of the £1 note was not due to the action of the present Government, said Mr. Savage, but it was the result of the policy of the previous Government, which raised the rate of exchange. "Mr. Lunn knows, or he should know, that New Zealand notes are just like the notes of any other country and never circulate outside their country of origin," said Mr. Savage. "They are worth to-day the same as when this Government came into power. The value of the New Zealand note was reduced from 20s to 16s Id by the Government that JJdr. Lunn Supposed."