TRADE REVIVAL.

Taranaki Daily News, 11 March 1921, Page 5

TRADE REVIVAL.

HELPING CRIPPLED EUROPE. EXPORT CREDIT SCHEME. EXTEXSION TO DOMINIONS. By Telegraph.—Press Assn.—Copyright. Received March 10, 7.25 p.m. London, March 10. In the House of Commons, Sir Robert Horne (President of the Board of Trade) explained the various export credit schemes. He said that under existing arrange, ments the Government required importers in necessitous countries to lodge at least a hundred per cent, security in local currency, and the Government then advanced the exporter his full costs, at the same -time guaranteeing him 80 per cent, against loss. Hitherto exporters had applied for advances totalling £2,000,000, and the Government actually advanced £400,000. The Government failed- to carry through the modified scheme of Mr. Ter Meulen (a Dutch financier), who proposed a syndicate to run the scheme, owing to the withdrawal of the insurance companies. It then tried to carry out the Ter Meulen scheme with bankers, and the latter agreed, but it would take a considerable time. The Government accordingly developed its own scheme, which would be operative sooner. Sir Robert Horne stated that the Government now proposed, instead of advancing exporters costs, to guarantee up to 85 per cent, of the price to the buyer, who would be required to find at least fifty per cent., the Government taking half the uncovered risk. This would enable the exporter to arrange with the banks in the ordinary way.

He added that the Government con. sidered such facilities should be granted, not merely to derelict European countries, but to the British Dominions, where the business would be equally great and the security safer and the permanence greater. (Cheers.) A member interjected: “Put it first.” Sir Robert Horne replied: “I agree, but we must not lose sight of the original purpose, which was to revive European trade.” He added that the scheme would not apply to raw materials, even if produced within the Empire.—Aus. and N.Z. Cable Assn.

The modified Ter Meulen scheme mentioned by Sir Robert Horne involved the Government lending a syndicate of financiers £13,000,000, half of the total required for export credits, the Government being liable to risks to that amount. The syndicate would run the scheme free of all expenses to the Government, taking the profits on insurance premiums charged to guarantee merchants’ bills as a reward for services, time and labor.

A Government export credits scheme was outlined in a White Paper issued last June. In defining the application of the scheme it was stated that advances would not be made for the export of raw material, or of surplus Government stores, and preference would be given to the finance of goods where the larger part of the cost was due to manufacture in the United Kingdom. Goods would only be eligible which were manufactured or produced either wholly or partly in the United Kingdom. The scheme was to apply to individual firms or companies domiciled in the United Kingdom for advances up to 80 per cent, of the cost of the goods to the exporter in respect of exports to the following- countries: Finland. Latvia, Esthonia, Lithuania, Poland, Czecho.Slovakia, the Serb-Croat-Slovene State, Roumania, Georgia and Armenia. The periods for which the credits would be granted were to be at the discretion of the department, but in no case were the credits to be for more than three years. Interest was to be calculated at the rate of 1 per cent, above the bank rate, with a minimum of 6 per qent. Commissions to defray* the expenses of the department, and to form a fund to meet any losses, were to be payable at the rates of not less than 3 per cent, for the first year, 4 per cent, for the second year, and sq)er cent, for the third year.