THE MARKETING ACT

Southland Times, Issue 22915, 13 June 1936, Page 6

THE MARKETING ACT

Effect On Trading Banks LOSS OF EXCHANGE (Special to The Times.) Wellington, June 12. Regret that in view of the services rendered to the dairy industry by the trading banks the Government, in framing its proposals, had decided to take away from them an important portion of dairy produce finance which in the past had been handled by them with satisfaction and at a modest profit was expressed by Sir George Elliot, chairman of directors, at the annual meeting of the Bank of New Zealand to-day. The loss of the London exchange for exports of that produce would make unprofitable the working of some of the bank’s branches, the existence of which had only been justified because of dairy factory connections. . Dairy produce would be the first ot New Zealand’s primary products to be marketed under the new Act, said Sir George Elliot. After August 1 next all dairy produce intended for shipment would, as soon as placed on board any ship for export, become the property of the Crown, which would make payment therefore at prices fixed from time to time by Order-in-Council. To enable those payments to be made, an overdraft would be granted by the Reserve Bank on an account to be styled the Dairy Industry Account. Proceeds of the produce, as it was sold, would be credited to that account, and if the amount realized was less than the guaranteed prices paid to the producers, the loss would be borne by the GovernThe Hon. W. Nash, Minister of Finance, who was also Minister of Marketing, was hopeful of securing a market lor all New Zealand s surplus dairy produce by reciprocal agreements with Britain and other countries. He was" shortly to proceed to London with that object in view, and his efforts to expand New Zealand’s markets would most certainly have the sympathetic support and goodwill of the public. One effect of the measure would be that, as from August 1 next, the financing of all dairy produce exported from New Zealand would be undertaken by the Reserve Bank of New Zealand on behalf of the New Zealand Government instead of by the trading banks on account of the dairy companics as in the past. The trading banks had played an important part in financing and developing the dairy industry from the inception of the cooperative scheme in New Zealand, and it was not too much to say that but for the assistance given by the banks, the dairy factories as a whole would not be in the flourishing position they were to-day, said Sir George Elliot.