DOWN TO SIX MILLIONS

Otago Daily Times, Issue 27358, 6 April 1950, Page 8

DOWN TO SIX MILLIONS

Dominion’s Spendable Cash In London WARNING TO IMPORTERS PA WELLINGTON, Apl. 5. New Zealand had spendable cash in London amounting to only £6,000,000 at December 31, 1949, said the Prime Minister, Mr Holland, addressing the Wellington Chamber of Commerce last night. People interested in importing should understand the position of the New Zealand overseas funds, he said. The Prime Minister said that at the end of last year New Zealand’s total funds in London were £54,000,000. People had asked why there could not be more imports in view of the existence of that amount of credit in London. From this total, however, must be subtracted £13,000,000 for day-to-day trading bank transactions, and then the amount required to maintain the Reserve Bank's ratio of assets to demand liabilities. This left a spendable balance of only £6,000,000. Reduction of Deficit Sought

Mr Holland said that New Zealand’s deficit in the balance of all payments in 1948 was £7,400,000. In 1949 it was £4,500,000, and for 1950 the original estimate was for a deficit of £10,000,000 to £14,000,000. The Government was taking steps to correct the position as far as possible, and was hoping to see the deficit reduced to from £2,000,000 to £5,000,000. This it was hoped to achieve because of the £1,500,000 extra from butter, a similar amount from meat, and £500,000 extra from other sources. The estimated reduction in Government expenditure overseas was £3,000,000. An appeal to persons lmlding private funds overseas to exercise discretion in handling them was made by the Prime Minister. He said the Government took its courage in both hands when it released privately-held overseas funds from control. These funds, he disclosed, totalled £39,223,000, being placed as follows: £ - United Kingdom .. .. 11,679,000 Australia .. .. •. 25,853,000 United States 446,000 ■ Canada 476,000 Other places 769,000 Of the total of £39,223,000, there was £2,483,000 held in the form of foreign balances, bank notes, and free and fixed deposits, and £32,821,000 listed in Stock Exchange Securities. The Associate Minister of Finance, Mr Bowden, was working out plans which would allow the use of these funds for importing purposes, thus permitting goods to be brought into the country which would not otherwise come to New Zealand, said Mr Holland. Dollar Trading Mr Holland set out New Zealand’s dollar trade figures for 1949. New Zealand’s dollar spending in that year was 73,000,000 dollars, and her sales to the United States 30,000,000 dollars, leaving a deficit of 43,000,000. Other payments by New Zealand in dollars totalled 13,000,000 dollars and receipts 3,500,000. thus adding a further 10,000,000 to the deficit, the final extent of which was 53,000,000 dollars. “We were able to find dollars to meet this sum because the United States made them available to Britain and to us,” said Mr Holland. “ With commitments this year, our deficit for the year -is estimated at 33,000,000 dollars.”