AMERICAN GOODS

Stratford Evening Post, Volume I, Issue 257, 8 October 1931, Page 6

AMERICAN GOODS

ADVERSE EXCHANGE RATE MANY ORDERS CANCELLED Press Association.—Copyright. WELLINGTON, Oct. 5. New Zealand importers are feeling the adverse effect of exchange alterations as a result, of Britain going off the gold standard, and those trading with the United States have been busy during the past few clays cancelling large orders and adjusting heir dealings to suit the altered conditions. Increased prices for American goods, with consequent reactions in favour of New Zealand manufactures, are predicted by some of the merchants here. The banks here are quoting a nominal rate of 3.50 dollars to the £ for drafts on New York, this being the New York quotation, less the ruling London-New Zealand exchange rate of 10 per cent., and a margin of cover for" the banks. The quotation is subject to adjustment, as the dollar exchange may vary. Bank customers are refusing to accept the low quotation except in cases of urgency, with a result that business with America has come practically to a standstill during the past week. Hundreds of orders are reported to have been cancelled, and American imports to the Dominion will be seriously affected unless the position readily adjust itself. Radio and Cars In the wireless trade it is feared that if the exchange remains in its present, position retail prices of wireless sets and other American radio goods will he increased by something like 30 per cent. This includes valves, in the trade for which there is heavy price-cutting just, now, America having reduced prices to compete with new and efficient English material.

As a result, of the extraordinary conditions, many radio orders have been cancelled with American houses, and British goods have been ordered in their stead, because the price of English goods will not be so adversely affected, as the New Zealand £ bears the same relation to the English £ as hitherto—with the difference created by the ruling exchange rate of about 10 per cent. In the motor trade the landed price of American vehicles will be increased by about 25 per cent, if the present position continues, with a result that the purchaser will have to carry the bulk of this added burden, even should the dealer agree to shoulder some of it.

Most of the importers have .stocks to carry them over until the end of the current year, and they are hopeful that before that date the exchange position will have adjusted itself. Film Trade Anxiety is displayed by those interested in the film trade, particularly the American side of this business. American film exchanges are faced with competition brought about by the rapidly growing popularity of British films, and at the same time they face the Government tax of 25 per cent, on net profits as well as smaller returns caused through lower box-office re* ceipts. For every £ of net profit the American film exchanges make in New Zealand, the Government take- ns', and the dollar exchange might reduce the remaining 15s to a little more than 10s by the time the money roaches New York.

It is considered unlikely that the film exchanges will raise Ihe price of film hire to the cinemas owing-' to the restricted business now being done, and on account of the heavy competition from the British producers. During this year New Zealand is screening approximately 20 per cent, of British films, as compared with less than 5 per cent, two years ago. Other American imports affected are fruit (dried and tinned), prepared foods, toilet goods, and clothing (including silk stockings).

As the immediate future is quite uncertain, importers are embarrassed in their trading operations, but they are naturally hopeful that the exchange will soon be stabilised at a higher rate than recent quotations.