THE OTAGO DAILY TIMES TUESDAY, DECEMBER 29, 1931. EXPORT LICENSES.

Otago Daily Times, Issue 21529, 29 December 1931, Page 6

THE OTAGO DAILY TIMES TUESDAY, DECEMBER 29, 1931. EXPORT LICENSES.

No comment has yet been offered by business organisations in the Dominion upon the decision of; the Government to introduce a system of licensing of exports with a view to the pooling of credits in London in the interests of the Treasury. This may be explained, however, by the fact that the regulations providing for this new departure were gazetted on the eve of the holidays without any warning that a step of the kind was contemplated. The motives which have actuated the Government are plain enou'gh and intelligible enough. The money market at Home is closed, or temporarily closed, against borrowing on the part of the dominions. It is no longer open to the Governments, therefore, to continue the expedient of paying the interest on their overseas indebtedness out of the proceeds of fresh loans. In the circumstances they must devise a plan under which the surplus in the value of their exports over the value of their imports shall be applicable to the service of their interest obligations. A plan of this nature has actually been in operation in Australia this year and has operated satisfactorily. By voluntary arrangement between the Australian Governments and the banks the exchange resources are mobilised whereby the x Governments have a priority of claim upon them so that they may be employed to meet the interest obligations. It may be a matter for regret that the Government in Ne-fo Zealand has thought fit to exercise compulsion to ensure a pooling of credits if the same result might have been achieved, as, with the Australian precedent in view, it might have been expected to be, by voluntary co-operation between it and the banks. The voluntary act, the Sydney Morning Herald observes, engenders .confidence. But since the aim of the Government is simply to apply in New Zealand tl|e system which has been adopted in Australia of providing for the meeting of interest obligations abroad the decision at which it has arrived is not one that should excite either suspicion pr uneasiness. It is clear that necessity has been imposed on the Government of adopting measures that will place at its disposal the means of promptly fulfilling its engagements. The trade figures for the current year are, despite the serious drop in the prices of the staple'products of the Dominion,. sufficiently satisfactory to ensure that there will be a balance? large enough to meet the interest charge. In’the event, however, of a continuance of low export prices, it is apparent that there must again in the coming year be a stringent limitation of imports such as there has teen in the closing year—-with itsl marked effect upon the Customs revenue—if a surplus of nine or ten millions of exports over imports is to be realised. When, howeyer, the principle is recognised that the stability of the national finance is of paramount importance, it may be anticipated that the trading community will accept without murmur any small inconvenience to which it may be subjected through the operation of the system that is being introduced.