DOMINION CREDIT

New Zealand Herald, Volume LXXVI, Issue 23384, 28 June 1939, Page 10

DOMINION CREDIT

LACK OF IMPROVEMENT POLICY NOT FAVOURED REVIEW BY THE TIMES [from our own correspondent] LONDON", June 2 Some difficulty in negotiating; the conversion 011 favourable terms of the £17,000.(KM) loan expiring next January is forecast for Mr. Walter Nash New Zealand Minister of Finance,. W the Times. In a leading article the results of import restrictions and exchange control arc reviewed, objectively, and the reasons are stated for the lack, of improvement of New Zealand's credit in the London financial market. jßelerring to the three main subjects with which Mr. Nash's visit is concerned, the Times says it sees little difficulty in arranging the details concorned with the defence of the Pacific. Trade and financial discussions, however, are regarded as falling in another category. "British manufacturers, " ifc j 8 stated, "have not been.satisfied by thu assurances given by Mr. Savage and Mr. NasJi that there is no intention of reducing permanently the trade between the two countries. Tliey believe that any attempt to control trade by the method adopted by New Zealand is bound to break down, though not before it lias done a great deal of mischief. Mutual Trade Expansion Scheme The Times-continues: "When Mr. Nash was in England two and &-half years ago, he brought with Lira a scheme for the expansion of mutual trade, to be based upon an undertaking by Britain .gradually to increase her purchases of New Zealand produce in return for an undertaking by New Zealand to spend in Britain practically the whole proceeds of the sales. "This was so much at variance with our traditional ways of conducting oversea trade that Mr. Nash could not persuade anyone in authority here to take it seriously. "The control regulations when they ■were issued excited much opposition both in New Zealand and .-in this country. "In Britain manufacturers asked how the new system could possibly be reconciled with the provisions ot the Ottawa Agreement, which guaranteed them ill New Zealand "full eppo'rtunity of reasonable competition on the basis of the relative co:>t of economical and efficient production." In goods of which the Dominion Government desire to foster the manufacture in New Zealand they are apparently to have 110 opportunity to compete at all. and even of other goods the amount'wliich they can export to New Zealand is to be limited;?at the discretion of the Government. Objections to Economic Control "It is not denied that New Zealand as a. self-governing Dominion has the right to adopt any economic system she prefers, but it is contended that in making the change from a free to a controlled economy she should have shown greater regard to the interests and the treaty rights of her best customer. .. . Six months' experience of the working of the new system has not removed these objections. Those who have suffered from the restrictions already in operation, and who are likely to suffer still more from the even more severe restrictions pontemplatedl for the second half' of this year, will not find it easy to accept the view that, in the long run. a controlled development is likelv to lead to an expansion of mutual trade on a basis sounder and therefore more permanent than was possible before. The controversy lias certninlv not improved New Zealand's credit iii the London financial market, where Mr. Nash is likely to find somo difficulty in negotiating the conversion on favourable terms of the £17.000.000 loan expiring next January. -