STERLING FUNDS

Taranaki Daily News, 25 September 1940, Page 3

STERLING FUNDS

WAR REPERCUSSIONS CONSERVATION NEEDED SOME PRICES DOUBLED

, : "The /..impression appears to be fairly widely held," said the Hon. W. Nash, Minister of Finance, in a statement on the fifth term import licensing policy, "that since considerable sterling balances are at present held by the Reserve Bank and the, trading banks a greater sum is available for imports and re- 1 strictions can accordingly be relaxed. "Such, however, is not the case. In fact, the conditions obtaining today all point to the necessity for! ma: " taining a close control of im-j ports and - avoiding expenditure of overseas- --funds for non^essential. imports which can be dispensed with at the present. •, , "As I haVe recently intimated," continued the Minister, "the relatively high level of sterling balances held just now is attributable to the following principal factors: Payment in advance for our main export products shipped to the United Kingdom; delay in the arrival of goods owing to difficulty experienced by suppliers overseas in promptly executing orders. To the extent that such is the case the drain on funds has been reduced in the meantime; the present is generally the time when following our export season balances are at a high level and in the normal course a reduction could be expected between now and the end of the year, but this position might be affected through difficulties referred to above, experienced under existing conditions, in obtaining goods from overseas. Import Selection's Effect. "Apart from the above factors the operations of the import selection scheme has had some effect in reducing imports and in improving the trade balance. "Fortunately, as a result of arrangements made with the United Kingdom Government for the purchase of our products it is possible to make a fairly satisfactory estimate of income which may be expected to accrue from exports next year," said Mr. Nash. On the other side, he added, there were commitments to be provided for in respect of overseas debts including interest and repnyment of loans. Some expenditure would also be necessary in respect of our forces abrond. As was generally known prices overseas of most commodities had greatly 'increased since the outbreak of war. Freight and insurance charges had also risen. In some cases the cost of essential goods had been doubled and the effect of this on overseas funds, particularly when increased quantities of the goods were, in some cases, required could well be understood.