The Daily News. SATURDAY, JUNE 11, 1921. THE FINANCIAL STRINGENCY.

Taranaki Daily News, 11 June 1921, Page 4

The Daily News. SATURDAY, JUNE 11, 1921. THE FINANCIAL STRINGENCY.

At the opening of rhe Winter Show at New Plymouth on Wednesday, the Minister of Agriculture (the Hou. W. Nos. worthy) said the present financial position of the Dominion was primarily caused by the commercial interests, which, through their vast imports into the Dominion, in the way of clothing, motor cars, and other materials, made a call on the financial institutions, and this did not leave to the primary producers of the country the financial ease and facilities they expected some twelve months ago, and which, in his opinion, were necessary for fuller development. The Minister evidently does not fully appreciate the position and difficulties of importers, or he would not have made such a sweeping statement. Very largely the importers could not help themselves. During the war years, goods were difficult, and, in some cases, impossible to obtain. Orders were given for the same goods to several firms in the hope that a part would come to hand. In that way importers were enabled to secure sufficient supplies to carry on. After the, Armistice the difficulty in filling orders was even more pronounced, the reason no doubt being that there were such good markets nearer at hand. Importers were asked to give practically open orders as to price and quantity, trusting to the discretion of the manufacturers and agents at Home and in America Then the slump came .suddenly and without warning. Before Dominion importers realised the true condition of trade at Home they were inundated with goods in execution of orders of the giving of which they had almost forgotten. They were “in the soup” before they knew it. They were obliged to accept the goods, and had to invoke the help of the banks to finance them. It is easy to be wise after the event, and say that, importers should have cancelled thti? orders. But the whole routine of trade had -so entirely altered, and the only way importers could ensure a minimum supply of goods was to give open orders and trust to the judgment and integrity of the firms with whom they had so long 110011 doing business. Many of these firms, -seeing their local markets affected by the financial crisis, and having warehouses filled with high cost goods, studied no one but themselves, and searched their files for uncompleted orders. And the colonial customers suffered, Really -the importers are to be sympathised with, and not blamed, for the position in which they found themselves.' In order to quit their goods, and so meet the demands of the banks, they have had to sell at prices often greatly under cost. Many have been forced to sacrifice their goods entirely so as to realise cash quickly. But the worst is npw over. Imports are decreasing steadily, and before long they should be at nearly normal level. Then the position will right itself, for the importers will be able to a large extent to “live” on their stocks and those held by warehouses in the country without having to import for some time. Excessive importations, however, is not the only cause of the stringency, as Mr. Nosworthy believes. Just as great a cause was the unexpected collapse of the wool and meat markets. Had the markets for these commodities been maintained, the Dominion would easily have got over the trouble caused by the increased importations. It was the two circumstances operating simultaneously that exhausted the financial resources of the Dominion. But we feel sure the condition is only temporary, and will give way to an improved and brighter situation in the near future. New Zealand is in a sound and strong positions and will come to no real harm if we but show our faith and confidence and meet the new conditions with that courage and optimism that distinguished our forbears, the real founders of New Zealand.