CONTROL OF CAPITAL

Otago Daily Times, Issue 23687, 20 December 1938, Page 9

CONTROL OF CAPITAL

DOMINION'S "NEW DEAL" COMMENT BY RETAILERS Things look different from different points of view. From across the counter, for instance, "the coming New Deal," as the official organ of the New Zealand Federation of Drapers, Clothiers and Boot Retailers calls it. and the present and prospective economic conditions of New Zealand are described as the retail trade sees them. As to trade in general, it is admitted that 1938 has been a satisfactory year on the whole, " though not without its times of worry and anxiety. Trade has not been quite so eocd as in the previous two years, but remembering far worse ones we have every cause to be thankful, and prospects for the coming year may bt regarded as very hopeful There are a few clouds about which we trust will disperse without developing anything stormy, and it is hoped the season of peace and goodwill will foster that muchneeded spirit in industrial, national nnd international affairs." More Production Gratification is expressed that the Government realises the importance of increased production as well as "bettering conditions all round. But, the article says. " we have constantly (jointed out that higher wages and shorter hours can only be sustained by higher production and more rapid consumption of oie goods produced; and that if costs soar' to cancel out the benefits created bv higher standards of Uving no one is really any better oil, and we are then in a worse position to meet and resist any temporary setback which may occur." Emphasis is laid on the importance to the Dominion of payable prices for New Zealand's primary exports, and then a view is taken of Government intentions to " secure increased production in both primary products and manufactured goods. A welcome announcement is made that the co-operation of private enterprise is being sought as the principal means towards this end, rather than the extension of State activities and encroachments on the field of business affairs. We are again promised a revision of the methods of taxation so that trade and commerce will not be over-burdened with a burden of taxation which hampers the expansion and growth which the Government now so wisely seeks." No Over-importing During the past year some anxiety has arisen about the decrease in the sterling funds lying to New Zealand's credit in London. "In some quarters there has been a tendency to blame importers entirely for this drain on our overseas credits. But comparisons of the total cost of imports this year with the previous ones do not support that contention entirely, and there is no doubt that even the increased imports are in a measure due to State activities in public works, State building operations, railway, post office, hydroelectric, dockyard, defence, and other equipment for State services which have been paid for in London by drawing on reserves there, and it is wide of the mark to blame our retail traders for the position that has arisen. " It would be a mistaken policy to interfere unduly with ordinary trading facilities with Britain on these false assumptions and idle talk with no foundation in fact. A "Fantastic" Description " When the rate of exchange was raised to 25 per cent, in London, there were firms shipping goods here who were satisfied for payment to be made in New Zealand, and the moneys to be invested here. That was all for the good of our country where additional capital is needed, especially when loan money was not available for overseas in London. With but little prospect of the exchange rate falling again, and some loose talk of it possibly advancing further, it is not surprising if those overseas firms which invested their funds here are now realising their securities, repatriating their funds, and so reducing our London credits. " It is fantastic to describe that as 'a flight of capital' in a domestic sense. It is merely the overseas owners of the funds realising what is, theirs, and using their unquestioned right to transfer it back to their more immediate control, and that is quite a different matter from local investors realising assets here to send it elsewhere for investment."