OUR-EXTERNAL TRADE

Hokitika Guardian, 3 February 1921, Page 4

OUR-EXTERNAL TRADE

(Lyttelton Times). At first glance the totals o£ external trade during the year 1920 undoubtedly are a little disturbing. It is generally admitted that a debtor country, such »s New Zealand, cannot be in a healthy condition unless it has a balance of exports over imports at least equal to the sum required to pay interest on loans. Judged by this standard, and on last year’s figures alone, the Dominion would seem to be in a bad way, namely .

Imports (>1,59(3,828 Exports 46,411,916

Excess of imports 015,154,882 Yet we are not alarmed, and we think there is no ground and no occasion for dismal forebodings. Certainly a lengthened period of trading on these lines would spell serious trouble, but the conditions that prevailed last year were new, more or less accidental, and quite abnormal, while they are not likely to recur. We hope that superficial observers who may be inclined towards pessimism will beware of attaching too much consequence to last year’s figures. The extraordinary advance of more than 30 millions in the value of imports, as compared with 1919, was due to a variety of causes, and some of them are in eveij way to be welcomed. For one thing, the Dominion’s progress was retarded for some years through the impossibility of securing supplies of essential goods, such as machinery, hardware, metals and building materials of various kinds. These came forward much more freely last year, and while this was a factor in creating the temporary unfavourable trade balance, the country is undoubtedly richer by the heavier importations. On the other hand, certain supplies have been embarrassing in their quantity the reason being that when trade slackened in Britain and America, manufacturers in those (and other) countries looked up their books and began to fill New Zealand orders which had in this country been long regarded as cancelled or dead. Hence it is that we have the extraordinary condition of imports heavily outweighing exports—for one year only. We realise that for the time being this state of things is unsatisfactory, but we think it can be shown that there is nothing at which the community is 'entitled to take alarm. A year is a very short period in the life of a country! and if we take a general survey of the'last few years it is seen at once that the position in regard to external trading is more than satisfactory. For the last six years the figures of external trade are: — Excess of

Thus in six years there was a net. balance of exports over imports of more than 40 millions, whereas the amount in the preceding six years was under 17 millions. Taking, only the last two years there is a favourable balance ol more than seven millions. Now in conjunction with these figures it should be remembered that in the last five veais the bulk of the public loans have been raised within the Dominion. Probably the external debt was not increased so greatly in that period as in the corresponding period before the war, when the balance of exports over imports was not nearly half as great as it lias jiccn in recent years. Some of our contemporaries have been making too jiiuch of the 1920 imports, forgetting that if an average is struck over five or six years the balance of exports is sufficient not only to pay interest cm external debt but oven to pay principal jn respect of outside indebtedness incurred during the war. The policy of local borrowing is now proving its merits.

Imports. Exports. Exports. 1915 20,658,1720 31,430,822 10,772102 1916 25,045,403 33,281,057 8,235,654 1917 20,742,124 30,613,184 9,871,060 j 018 30,308,908 52,573,520 22,264,612 1920 01,5%,828 46.441,946 ‘15,154,882 ’Excess of imports.