MERCHANDISE IMPORTS

Wairarapa Times-Age, 6 February 1939, Page 4

MERCHANDISE IMPORTS

RISE IN PRICES EXPECTED. /WITHDRAWAL OF EXCHANGE ALLOWANCES. (By Telegraph—Press Association.) DUNEDIN. February 5. An increase in the prices of general merchandise lines seems inevitable following the decision of a number of English mercantile firms to withdraw their previous exchange allowances to wholesale firms because of the Government’s import restrictions. Some firms have already cancelled this allowance.

Explaining the situation today, the manager of a mercantile firm said that some British manufacturers had been extremely liberal. They had stood by the exchange rate, either wholly or in part, up to the rate of 25 per cent. In this way they had kept costs down and saved an increase in the prices of goods. Now they could stand it no longer. Each day the restriction of imports was reflected in the withdrawal of exchange allowances. The Government’s import control scheme is the reason for British firms taking this step. The opinion was expressed that other firms will soon follow the lead of those who have already closed down on their exchange allowances.

For some time past British firms had stood the cost of exchange in the hope that the percentage rate would be reduced. Some firms had placed money in the Dominion and a few of the principal concerns had taken the opportunity to transfer capital to Great Britain.