TO REVIVE TRADE

New Zealand Times, Volume XLVII, Issue 10846, 11 March 1921, Page 6

TO REVIVE TRADE

EXPORT CREDIT SCHEME ASSISTANCE FOR IMPOVERISHED COUNTRIES. BRITAIN’S PROPOSAL. Dy Telegraph—Frees Assn.—Copyright Australian omi N.Z. Cable Association. (Received March 10. 7.25 p.m.) LONDON, March 10. Sir R. S. Horne, in , tho House of Commons, explained the various export credit t-eliemes. lie said that, under the existing arrangements, the Government required importers in necessitous countries to lodge at least 100 per cent, security in local, currency The Government then advanced the exporter hie full costs, at the same time guaranteeing him 80 per cent, against Joss. Hitherto exporters had applied for advances of TL'2,000,000. The Government actually advanced £400,000 The Government failed to carry through n modified scheme owing to the withdrawal of the insurance companies. It then tried to carry out the modified scheme with the hankers. The latter agreed, but it would take considerable time. The Government accordingly developed its own scheme, which it would be able to operate sooner.

Sir R. S. Horne stated that Government now propceed, instead of advancing exporters’ costs, to guarantee up to So per cent, of the price to the buyei, who would bo 'required to find at least 50 per cent., the Government taking half the uncovered risk. This would enable the exporter to arrange with the banks in the ordinary way. He added that the Government considered that such facilities should he granted, not merely to derelict Euro* pean countries, but to British Dominions, where business would be equally gTeat, security safer, and permanence greater. (Cheers.) A member interjected: “Put it first.”

Sir R. S. Horne replied: “I agree, but we must not lose sight of the original purpose, which was to assist to revive European trade.” He added that the scheme would not apply to raw materials, even if produced within the Empire The scheme referred to had its origin in a proposal by the League of Nations to provide machinery whereby the impoverished countries of Europe might issue bonds secured by Crown lands or specific source® of national revenue to enable them import- the necessities required. A cable'message received early in January stated: —ln connection with tho credit scheme negotiations are proceeding between the Government, the bankers, and the insurance companies. The scheme proposed by Sir Edward Mountain involve* the Government- lending a syndicate of financiers thirteen millions, half the total required for export credits, tho Government being liable for risks to that amount. The syndicate would run the scheme free of all expense to tho Government, taking tho profits on insurance premium® charged to guarantee merchants’ hill* as a reward for services, time, and labour. The Government considers this too favourable to financiers. Sir Edward Mountain says that unless some big hazards occur the Government will’ never be called on to pay a penny.