PAINT BUSINESS

Gisborne Herald, Volume LXVI, Issue 20107, 29 November 1939, Page 7

PAINT BUSINESS

STOCKS OF OIL LOW MERCHANTS ALARMED Merchants in the paint business in Dunedin express alarm at their inability to procure sufficient stocks of oil for the manufacture of paint, large quantities of which are made in the Dominion. So acute is the shortage that merchants are scouting round the country trying to buy meagre slocks to keep their plants going, even on a reduced scale. Prices have soared in consequence, and a product which usually costs 5s a gallon in five-gallon drums is now fetching 8s 3d in 45gallon lots. Licenses for importations from Britain are available, but these are of little use when finance cannot be arranged. A drastic curtailment in staff personnel must inevitably follow early in the New Year.

An indication of what the position is in England, and how shippers at that end view the Dominion business, may be gathered from the following letter received by a merchant: “We greatly regret having to raise difficulties, but we cannot supply against allocation in New Zealand currency, nor can we supply against allocation as distinct from credit here, or remittance here, at all. The principal reason for our inability to supply against a New Zealand currency allocation is the risk of exchange. A bill would be drawn, it is true, at the rate of exchange or sight drafts in London, but your Government, through the Reserve Bank has chosen to decree that remittance of proceeds will be made at the rate of exchange then ruling.

‘•Since the Reserve Bank generally retains money for varying periods after drafts have been paid, such periods ranging in some cases up to six months, we should be at the risk of exchange during such period or periods, a risk we can no longer even consider taking further. Were we to ship goods to the value of, say, £IOO, New Zealand currency, based on the rate of exchange at shipment, an alteration in the rate prior to expiry of usance of our drafts might very well leave you with insufficient New Zealand funds to pay.”