AVOIDING DEFAULT

Gisborne Herald, Volume LXVI, Issue 19985, 10 July 1939, Page 5

AVOIDING DEFAULT

DOMINION DEBTS EFFORTS IN LONDON NEW CREDIT FACILITIES PROBLEM FOR MR. NASH CABINET VIEW AWAITED (Elec. Tel. Copyright—United Press Assn.) (Reed. July 10, 9 a.m.) LONDON, July 9. It is understood that the abrupt decision of the New Zealand Minister of Finance, Mr. W. Nash to postpone his departure for New Zealand is due to a desire to await a reply from the Prime Minister, the Rt. Hon. M. J. Savage, as to whether the Government is satisfied with the offer of arms credits and export credits facilities

It' is held in London that the extension of such credit facilities would at leas: serve to avert a default in commercial payments, which otherwise is regarded as inevitable in the next few months.

The trade balance normally swings against the Dominion at this time of the year. Consequently, despite the intensification of the Government’s restriction of imports, banking circles believe that there is no possibility of the London funds lasting until the export season opens in January. Loan Redemption Problem Default in commercial payments would intensify the major problem of finding funds to redeem the loan of £17.000.000. The greatest obstacle to the success of the recent negotiations, says the Financial News, has been the economic weakness resulting from. Mr. Savage's programme. Some modification. therefore, is regarded as essential if the confidence in New Zealand credit is to be restored. It is strongly rumoured that the redemption loan will temporarily be affected by recourse to short-term borrowing, similar to the Australian loan some years ago. It would be costly, but the launching of a longterm loan is virtually Impossible. Mr. Nash yesterday farewelled his wife who is going to" America aboard the Aquitania from Southampton. He will follow aboard the Queen Mary on Wednesday, rejoining Mrs. Nash •at San Francisco after flying across America.