The Waikato Times MONDAY, MAY 25, 1936. BALANCING TRADE

Waikato Times, Volume 119, Issue 19894, 25 May 1936, Page 4

The Waikato Times MONDAY, MAY 25, 1936. BALANCING TRADE

The statement made by the Minister of Finance, that surplus funds overseas would be used, in the first place to meet interest and other commitments, then to finance imports from Great Britain, and lastly to make purchases in other countries, should not be interpreted too literally. There are many necessaries that can be. ohtained only from countries where they are produced. Great Britain could not supply, for instance, tropical products, although it should be possible to transfer no small part of that trade from foreign to British possessions. There would, in some cases, be credits available to a limited extent due to foreign States purchasing products from New Zealand, but even so the financial arrangements are usually made through London. It is the clearing house in this respect. The Marketing Bill, for the present, is to be applied only dairy produce, but it really gives the Government power to control the Whole of the export trade of the Dominion, and it is. evident that, although there is to be no State responsibility for the marketing of wool and meat, the funds overseas obtained by firms and individuals from the sale of these things are to be transferred to the Reserve Bank. In all probability that will be efieeted by making the transfer a condition of the permit to export. Similarly the control of the only available funds overseas can be used to give the Government sole control of imports, and the classifications made by the Minister of Finance Show how, in general, that could be efieeted. But there has been a much more explicit statement with regard to the matter than that of the Minister of Finance. The \Vellington papers recently quoted the Prime Minister as saying that “the time has passed when the individual could decide what country’s goods were to be imported into New Zealand.” The significance of that statement should not be overlooked. It means that importing firms Will not be free to buy in what they may regard as the best market, and that implies that they will not be able to purchase the articles that they deem the most likely to meet local requirements. In many respects that limitation may not create trading difficulties, but in some cases Where patents are concerned and the manufacturing rights have not been purchased by firms in the countries from which imports may be obtained, then problems, and some of a. serious nature, may arise. , It seems probable that the world is passing into a stage of trade regulation on a. national basis. The Commonwealth is to take active and drastic steps in that direction, but the creation of more and still more barriers to trade cannot provide a solution. The barriers already in existence, tariffs, embargoes and manipu—lated currencies have all centributed to hamper the free flow of world trade. If these things are regarded as merely bargaining weapons then they may serve some purpose, provided the bargain is struck and the barriers then removed.

The chief hope is that, in these matters, the Empire will tend more and more to operate as a trade unit, and its huge purchasing power would then be a. power in restoring normal conditions. The sterling group would extend the area in which trade would be more free and the ultimate objects of the Ottawa Agreements would be brought closer. The real difficulty that will face the Government as it develops its new policy will be to effect the changes without interfering with the running of the machine. They must be made while it is operating, otherwise the trade of the Dominion would be seriously interrupted.