LOAN RAISED IN LONDON

Southland Times, Issue 23921, 13 September 1939, Page 9

LOAN RAISED IN LONDON

BRITISH EXPORTS TO NEW ZEALAND' , EXPLANATION MADE BY MR NASH (From Our Parliamentary Reporter) WELLINGTON, September 12. The arrangements made with the Exports Credits Guarantee Department of Britain were designed to facilitate the export of goods from the United Kingdom to New Zealand, stated the Minister of Finance (the Hon. W. Nash) in the House this afternoon in reply to an urgent question asked by Mr C. A. Wilkinson (Ind., Egmont). Mr Nash emphasized that the New Zealand Government’s obligations to the existing industries in the Dominion had been fully protected. Mr Wilkinson asked if Mr Nash would give the House information about the recent loan, arranged by him in London, amounting to £4,000,000 for commercial purposes, and its relationship to the export of goods from the United Kingdom to New Zealand. He also asked if the Minister was aware that at the present moment _ English shippers were demanding sterling payment in London before executing orders for essential goods that. were required in New Zealand to maintain production. “Also,” he said, "will the Minister advise if there were any stipulations made by the lenders about the establishment in New Zealand of uneconomic industries, qnd, especially, a large undertaking to which the Government had apparently committed itself ' “In cases where it is necessary, because of the recent shortage of sterling funds, to import goods from the United Kingdom on a basis of payment being partly deferred for several months, the arrangements made will enable the United Kingdom exporter to go to the Export Credits Guarantee Department and obtain a guarantee of payment in sterling of 75 per cent, of the postponed remittance,” replied Mr Nash. “At this end. to obviate business being hampered by doubt and uncertainty, arrangements have been made for the Reserve Bank to issue remittance authorities fixing definitely the particular months when sterling can be made available for the. individual holders of import licences. RATE OF EXCHANGE “Furthermore,” said Mr Nash, “any risk of loss from possible changes in the rate of exchange in the interim has been avoided by the trading banks being authorized to sell immediately sterling for delivery at the times fixed in the remittance authorities. These arrangements, reinforced if so desiref by the United Kingdom exporter with the guarantee of the British Government, should enable any United Kingdom exporter to obtain readily immediate finance from his bankers against shipments to New Zealand. “Some cases have been brought .to notice here where difficulty is. being experienced in arranging for imports on the deferred-payment basis and these difficulties have naturally been accentuated by the outbreak of war, Mr Nash continued. “Every endeavour is being made to find a way out of such difficulties as they arise and so far as imports from the United Kingdom are concerned the credits procedure set out above should overcome them.” . Mr Nash reminded Mr Wilkinson of the memorandum on New Zealand’s policy of regulating imports and . its application to imports from the United Kingdom issued in London in July on behalf of the United Kingdom and New Zealand Governments in which New Zealand agreed not to use that policy to foster uneconomic industries and to invite the views, of the United Kingdom industries concerned to assist in determining what goods could be economically produced in the Dominion. In cases where it was proposed to grant a limited number of licences to manufacture particular kinds of goods the New Zealand Government would give the United Kingdom interests opportunity, should they desire, to put forward proposals for undertaking such manufacture. No reference was made to any particular industry and. the Government’s obligation to existing industries in New Zealand were fully protected, Mr Nash added.