MR. NASH IN LONDON

New Zealand Herald, Volume LXXVI, Issue 23394, 10 July 1939, Page 8

MR. NASH IN LONDON

A report that Mr. Nash had delayed his departure from London to await a reply saying whether the Government was satisfied with the offer of credits is denied by Mr. Savage. Its currency implies that conditions have been attached to the offer, as no doubt they have been; but those conditions will prescribe where and how the credits are to be utilised. That is the only concern of the departments which handle the business. Their object is to serve the cause of British export trade, and it is simply not credible that the terms on which the credits have been offered bear in any way on New Zealand's domestic policy. A suggestion, later in the message, that some modification of Mr. Savage's programme is essential, is made wholly on the authority of the Financial News, and refers to a restoration of confidence to make conversion or redemption of the £17,000,000 loan possible. The shortage of sterling funds, making it doubtful whether ordinary commercial payments can be kept up, naturally creates an atmosphere very unfavourable to the loan transaction Mr. Nash has been trying to arrange. The market itself is unfavourable, as the fate of the recent Australian loan showed. Therefore the low state of New Zealand's London resources intensifies a condition already existing. In one respect the London message is based on well-known facts. The present is a time when normally London resources are drawn on to finance New Zealand's import trade. A new accumulation, the yield of the export season, does not generally begin until January, usually reaching its peak in May or June. Therefore, unless the credit facilities offered are accepted, the sterling situation cannot be amended before the end of the year. These facts the Government will be bound to take into account, but they are entirely distinct from any conditions that may be attached to the grant of export credits.