BANKS REFUSE FUNDS

Southland Times, Issue 23839, 9 June 1939, Page 7

BANKS REFUSE FUNDS

Credit For Second Period Goods IMPORTERS FACE PROBLEM (United Press Association) NEW PLYMOUTH, June 8. A flat refusal, in the meantime, , to provide funds for the purchase of overseas goods authorized by second-period licences is. being made by the trading banks in New Zealand. This position was discovered today by two big importers, who stated that the effect was serious. The banks, they stated, were hot issuing credit for. secondperiod goods in spite of the ample licences held by importers. This means that payment cannot be made for goods already ordered, and possibly ready for shipment, and as shippers are not prepared to take a risk, credit is held up in New Zealand indefinitely, and the goods are not being forwarded. It is considered that some goods may already be on. the water to arrive in the second period. In the past the trading banks have been providing credit relative to the permits the Reserve Bank has granted, but the trading banks, it is believed, have not been reimbursed for all firstperiod goods, and so are not prepared to take a risk for the second period until the position is clarified. It is understood that there is no differentiation between one trade and another, but credit is being issued to no one. The fact that importing firms have ample funds in New. Zealand makes no difference. They still cannot secure the finance they require overseas to take advantage of their import The suggestion was made in one quarter that the banks’ refusal would continue until the Minister of Finance (the Hon. W. Nash) completed his mission in London and provided adequate sterling funds. PROBABLE REASON FOR BANKS’ ATTITUDE It was reported in Invercargill yesterday that the probable reason for some of the banks not providing funds in the meantime for second-period purchases was that they were waiting to see how their balances for the first period stood before entering into commitments for the second period. Applications for funds were referred to Wellington. It was understood by one busmess man that although the banks were reducing the amounts, sought, no complete ban had been imposed.