The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES." GISBORNE, TUESDAY, JULY 4, 1939. OVERSEAS TRADE

Gisborne Herald, Volume LXVI, Issue 19980, 4 July 1939, Page 4

The Gisborne Herald. WITH WHICH IS INCORPORATED “THE TIMES." GISBORNE, TUESDAY, JULY 4, 1939. OVERSEAS TRADE

The returns of the Dominion’s overseas trade for the month of May contain several surprising features. The first, and most encouraging, is that the exports for the month ait £6,638,000 were the highest for May for many years and more than double those of the worst of the slump years. Taking the first five months of the calendar year, it is found that exports total £31,637,000, or only £3,250,000 less than for the full year of 1931, and a figure that has only once been exceeded in the history of the country. If the export figures alone were any criterion, therefore, it could be assumed that only once before had the country been more prosperous. The exports, however, represent only the revenue and, as in all other things, it is necessary to study also the other side of the ledger, and this leaves a less satisfactory position. The imports for May were valued at £5,338,000, the highest for many years past and double those for the same month in either 1933 or 1934. For the first five months of the year, imports were valued at just under £23,000,000, again more than double the corresponding figures for 1933 and 1934 and only about £500,000 below last year’s record.

The astounding thing to most people will be that five months of import control has had little apparent effect on the value of imports, and this fact

seems to demand some explanation. Imports this year to date are little more than £500,000 lower than last year, more than £2,200,000 above those for 1937, £6,500,000 above 1936, and £8,500,000 above 1935. It might well be asked where import control comes in. Since there lias undoubtedly been a restriction of some imports, it seems to follow that there has been an increase in other directions. Is it, perhaps, that the Government’s own imports are expanding in proportion to the reduction of private purchases, or is it that increased imports of plant and raw materials are compensating for any curtailment of manufactured goods? Another possible contributing factor is that large

quantities of imports are being obtained on the time-payment system, without any immediate call being made on sterling funds, but if this is so it means that the Dominion, which already is having difficulty in paying its way. is merely piling up more overseas debts. The present position is far from satisfactory, because the country is clearly importing in excess of its means—in other words, living beyond its income. This year the position has shown some improvement on last, because at the end of May there was an excess of exports over imports of £8,650,000, an increase of £780,000 over last year, but it must be borne in mind that the export season is now nearing its end, and. that for the balance of the year, in the normal course of events, there would be an excess of imports. Taking the eleven months

of the production year, the excess of exports over imports is only £1,400,000, which goes a very small way towards meeting overseas debt and other charges. At the corresponding date last year the excess was more than £2,000,000 and for the five preceding years it averaged almost £14,000,000. There is the unexplained paradox that as the export income of the Dominion has increased the surplus available for the payment of debt charges has diminished; that the better off the country appears to be the more difficulty it is experiencing in paying its way. When the reasons for this vast increase in imports are understood and the necessary remedies applied, the Dominion may again get back to a sound position and there will be no need for such artificial measures as exchange and import control. In the meantime, the disadvantages of the control system are be-

coming more and more apparent and the benefits remain imperceptible. The avowed objective ol’ building up London funds has not been achieved, for now, at the end of the export season, overseas funds are little higher than they were when control was established. While little has been gained, much has been lost, for there is accumulating evidence of dissatisfaction on the part of overseas interests with which the Dominion has been accustomed to deal. Australian suppliers of building material are threatening to boycott New Zealand and British manufacturers have been bringing strong pressure to bear on Mr. Nash. Only this week it was announced that the Canadian Trade Commissioner in New Zealand was being withdrawn because of the restricted opportunities for trade, and a few days earlier it was reported that the Californian Assembly had refused to vote funds for participation in the Centennial Exhibition. On top of these things, the Government itself has been compelled to take more drastic action to quarantine funds in New Zealand. Under the exchange control plan, money orders were first restricted to £lO a week. Then they were reduced to £5, and now it is necessary to undergo a form of inquisition and procure a permit to send more than £1 even to needy relatives overseas. These things are not calculated to increase confidence in the Dominion and they all point to the need for removing the causes of the present problems,