The Daily News. THURSDAY, FEBRUARY 23, 1922. AN IMPORTANT SCHEME.

Taranaki Daily News, 23 February 1922, Page 4

The Daily News. THURSDAY, FEBRUARY 23, 1922. AN IMPORTANT SCHEME.

It is expected that the amended exports credit scheme, under the British Trade Facilities Act, will play an important part in developing British trade in many overseas markets. Under the original proposals, which failed to attract, credits for only £1,300,000 were taken up, but the new scheme is already proving very much more serviceable (according to recent Home files). It is not merely a scheme to assist overseas importers, but its Provisions also include facilities for local bodies in carrying out capital undertakings, and it is is that direction that mueh benefit may be conferred upon the Dominions. In promoting the export of British manufactures, the regulations provide for the granting of a maximum of twenty-six millions sterling for export credits, under conditions that are quite simple, the basis being the guaranteeing of drafts by the British Government against goods exported from the United Kingdom to any foreign country or part of the Empire, except Russia, India, Ceylon and the Straits Settlements, but excludes arms and ammunition. One condition is that the goods must be wholly or partly manufactured or produced in the United Kingdom, including coal. The guarantees to be given will be based on two systems: (1) General credits, i.e., credits which do not involve a separate reference to the Export Credits Department as to each transaction ; (2) credits in respect of separate transactions. To defray the expenses of the department, and,to form a fund to cover losses, a cofnmissiou is charged. The period of credit is not expected, as a rule, to exceed six months, but renewals can be arranged, while the department will not necessarily require security to he put up by the importer. It is needful to note that no applications for credit will be entertained for the purpose of financing the carrying of stocks, or for goods shipped on consignment —a wise provision evidently intended to prevent fostering speculation. There can be no question that the intent of this part of the scheme is to foster and stimulate the expansion of British trade by enabling purchasers to obtain that credit which is impossible under ordinary trade conditions. The part of the scheme which should certainly prove of great service to the Dominions is the provision that the Imperial Treasury may guarantee the principal and interest of any loan which may be raised by any Government, public authority, corporation, or other body of persons, for the carrying out of any capital undertaking, provided the application of the loan is calculated to promote employment in the United Kingdom, connected with the manufacture of plant, preference being given to applications which ensure the immediate jlaeiaa io? export- The

Imperial Treasury cannot, however, make advances or grants, its powers being limited to a guarantee for loans that thereby will be classed among what is known as gilt-edged securities, while the Advisory Committee has to be satisfied that the proposal for which the loan is required cannot reasonably be financed without Government assistance. As the prime object of the scheme is to stimulate British industrial activities and thereby to provide employment for a large number of workers who have been idle during the period of trade depression, necessarily the scope of its operation is restricted to those objects which can alone relieve unemployment, and it must not be regarded as designed for any other purpose. At the same time it is capable of being of great benefit to the Dominions, besides which it emphasises the great principle of trade within the Empire. It is a practical and sound scheme, designed to solve a very difficult problem, and the Dominions may well take part in bringing it to the success which it certainly merits.