AUSTRALIAN EXCHANGE

Taranaki Daily News, 29 April 1931, Page 12

AUSTRALIAN EXCHANGE

DEMAND BY CUSTOMS. POSSIBLE'ILLEGALITY. • An admission that possibly the demand for deposits equal to the full amount of additional exchange on the value of goods from Australia could not be upheld in law was made by the Comptroller of Customs, Dr. G. Craig, in a letter received by the council of the Auckland Chamber of Commerce. The chamber, after making certain inquiries of the comptroller, had written to him on April 14 submitting that according to the second schedule of the Customs Amendment Act, 1921, the special duty levied on goods from countries with depreciating currencies did not exceed 25 per cent, of the amount of the depreciation, and the chamber had never contemplated the imposition of a duty equal to 100 per cent of this amount. The letter also declared that so high a duty could not be justified on economic grounds and expressed grave doubts whether there was any legal authority for the action taken. The chamber objected especially to its application against goods obtained almost wholly from Australia.

“In all the cases except one, which I have investigated during the past six weeks in which exchange premiums oyer 5 per cent, have been allowed, it is quite evident that if some action had not been taken under the Customs Acts the result would have been in effect to lower the rate of duty payable by the amount of the premium,” said Dr. Craig, in the course of his reply, dated April 21. “In these circumstances it may well happen that the protection afforded by Parliament to local primary and secondary industries might be made ineffective owing to the advantages obtained by importing goods from the Commonwealth. “Duties of 20 and 25 per cent, ad valorem, plus primage or surtax, are imposed on many classes of goods shipped from Australia to New Zealand, and if exchange premium at the rates mentioned is allowed to operate without any corresponding set-off, the result must be to reduce the sale and production of New Zealand goods, thus increasing the difficulties of local primary producers and manufacturers and throwing more men into the ranks of the unemployed. “In view of the possibility of this taking place, the Government decided that some action to protect our own primary and secondary industries was urgently necessary, and it was decided to invoke the provisions of section 11 of the Customs Amendment Act, 1921. “In the isolated case to which I have referred, an adjustment of the internal prices had already taken place. Varying opinions were received as to the reason for the adjustment, but as no lacal primary or secondary industry was prejudiced it was decided to admit the goods without any deposit. The recognition that su'ch cases would arise was one of the reasons why it was decided that each case was to be considered on its merits and that doubtful cases were to be referred to this office.

“This also illustrates the way in which it was considered that effect was being given to the desirability of a partially counteracting dumping duty, referred to in the Auckland Chamber of Commerce Journal for March, 1931. Had it happened in the case mentioned that a partial adjustment of internal prices only had taken place a deposit less than the amount of the exchange premium would have been required. “It may be that a court of law would take a different view as to the effect of section 11 of the Customs Amendment Act, 1921, but until the view of the court is obtained the department must act on its interpretation of the Statute.”

The president, Mr. A. M. Seaman, remarked that the comptroller was incorrect in saying that if action had not been taken the effect would have been to lower the rate of duty payable by the amount of the premium. Actually the amount on which duty was payable would have been lowered to that extent. He knew of cases in which deposits had not been required, upon condition that the selling price of the goods was not lowered. A member: And this is a time of falling prices. Another member remarked that quite possibly the demand would be tested in the courts before very long. The letter was received.