VIEWED WITH GRAVE MISGIVINGS

Timaru Herald, Volume CXLV, Issue 21215, 9 December 1938, Page 9

VIEWED WITH GRAVE MISGIVINGS

Policy of Controlled Exchange New Zealand’s Decision Under Fire Departure from British Tradition Conc<grn In Great Britain United Press Association—By Electric Telegraph—Copyright (Received December 8, 5.5 p.m.) LONDON, December 7. “Tlie Time':” in a leader says: New Zealand has become the first to abandon the traditional British system of open markets, and experiment in regulated or selective trade methods, characteristic of totalitarian countries. Because of the trend of trade, these measures have not surprised London or Wellington, though it is regretted that the Government's policy of lavish expenditure should have produced so quickly its inevitable effct in financial and currency embarrassments, whatever the motives inspiring the Government. No one will regard the new development without grave uneasiness, who has seen how such restrictions once Introduced, tend to increase In severity and complexity. It is more to be regretted because it is a move from the policy of tire Anglo-American agreement, which aims at extending the valume and area of open marketing. "The Manchester Guardian” commenting on New Zealand's financial proposals states: "Other Governments have discovered that simple initial measures need progressive and complex support before private foreign dealings are effectively controlled. New Zealand thus provides students of economics with another experiment worth watching.” Views of the City An Independent Cable message from London says that City opinion, especially among the banks is that New Zealand is now taking the right measures, but these would better have been taken months ago. There is no fear that New Zealand will fall into default or be unable to put her house in order, but there are fears for the trade outlook between Great Britain and New Zealand. British exporters want to know more clearly what New Zealand intends regarding luxury imports such as motors, whisky, fancy leather goods and domestic comforts. These circles are puzzled from what has been announced here, because the announcement does not say what will happen to orders of New Zealand Importers for the periodical delivery of goods running into next year. Traders in Britain fear that they may be victims, especially those concerned in luxury exports.

MENACE OF TRADE BARRIERS VIEWS OF AMERICAN AMBASSADOR British Official Wireless (Received December 9, 6.30 p.m.) RUGBY, December 8. The Unlited States Ambassador in London (Mr James P. Kennedy), speaking at Plymouth on the difficulty of removing trade barriers said: “AH of us must accept some responsibility for some of the conditions which now prevail. Some of us, however, have seen the error of our ways and have offered to join other nations in making a reduction in the excessive trade barriers. It is a long and hard job. It is so easy to create barriers. It can be done with a strike of a pen and nobody feels the blow. To remove trade barriers, on the other hand, is felt by specific industries and felt at once. That is what makes a reduction of trade barriers so difficult.” Mr Kennedy added: “Tire fact that the basis for so many of our problems was economic and therefore within our power to solve, should encourage us to hope th.it solution would be found.” CRITICISM OF POLICY Higher exchange rate ADVOCATED United Him association—By Biscu-is I'eiegraph—Copyright (Received December 9, 1.30 a.m.) SYDNEY, December 8. Professor Hytten, economic adviser to the Bank of New South Wales, commenting on the situation in New Zealand, declared that the most obvious way of carrying on would have been simply to have allowed the exchange rate to go to a higher figure. This would have reduced real costs as opposed to money costs in industry, and would have saved a good deal of expenditure which the Government is now going to face in connection with the guaranteed price for butter. Advice Received in Sydney Official adviqe of the New Zealand Government’s Orders-in-Council, dealing with the licensing of exports and imports were received by the New Zealand Trade Commissioner in Sydney to-day. MARKED DOWN SHARPLY PRICES OF NEW ZEALAND STOCKS United Press Association—By Telegraph —Copyright LONDON, December 6. Prices of New Zealand Government Bonds were marked down sharply as a result of the latest measures. Most issues lost one to li points; 3 per cents. (1952-55), are quoted at 25, and lost 10 point o