The Wanganui Chronicle TUESDAY, AUGUST 25, 1931. THE TRADING POSITION

Wanganui Chronicle, Volume 74, Issue 200, 25 August 1931, Page 6

The Wanganui Chronicle TUESDAY, AUGUST 25, 1931. THE TRADING POSITION

jypl. COATES’ motion to set up an Inter-Party Parliamentary Committee to seek expert advice as to how to meet the present situation, was urged and accepted on the ground that the position had become worse during recent months. In how far is this contention soundi . During the month of July there was a considerable decrease in the eternal trade of the Dominion. Comparing the same month of last year with this, the position is as follows: Year. Exports. Imports. Excess. 1930 .. .. £3,384,742 £3.014,713 £370,029 1931 .... 2.227,313 1,859,251 368,062 These figures indicate a decline in the national income of nearly one’third, and a corresponding decline in imports, with the result that the margin of excess exports remains about the same in the months under review. The balance of exports over imports is more strikingly shown, however, by a comparison of the figures for the first seven months of the calendar year. These are as follows for last year and this: Jan-July. Exports. Imports. Excess. 1930 .... £33.165,433 £25,582,256 £7,583,177 1931 .... 24,012,289 14,774,556 9,237,733 The seven monthly period shows a better position in one | respect, namely, that a condition of equilibrium is being established in that the excess of exports is now more than is required to meet the overseas interest bill. The restoration of a favourable balance of trade has been brought about by a contraction of imports. This contraction has been drastic in the extreme, the like of which has not been seen for more than a decade. This contraction of imports entails some serious consequences. It means that those who are engaged in the distributing trades have their trading turnover reduced by more than one-third. It does not follow that the average trader’s income has been reduced in that ratio. Falling prices and increasing trading losses have also to be taken into account. The natural result of such a condition is a curtailment of staff employees, because fewer of them are required to handle the diminished business. Another factor which is implied in the reduction of imports is that credit will not be as readily extended by wholesalers to retailers when the former are not overstocked with goods. This results in the weaker retailers dropping out. In more normal times such retailers are among the income tax payers. To-day, in consequence of the contraction of incomes in the trader class the income tax yield is likely to be adversely affected, and there is every reason to believe that such a consequence will affect the Treasury’s income during the current financial year. The foregoing is the darker side of the picture, and although the position to the end of July does not bear a bright aspect, it cannot be regarded as a hopeless situation, as the foregoing will show. The Financial Statement was introduced into the House of Representatives on July 30, so the Treasury officials could hardly be unaware of the trend of the Dominion’s trading position at the time the Budget was introduced. Nor has there been any evidence adduced since which should destroy the value of the Budget estimates for the current year. Despite, therefore, the statements to the contrary, it can hardly be a new trend of trade and finance generally, which is causing the politicians so much concern at the present moment.