PAYING FOR IMPORTS

Wairarapa Times-Age, 17 August 1939, Page 7

PAYING FOR IMPORTS

REMITTANCE OF FUNDS INDICATION OF DRASTIC RATIONING. TRADERS BEWILDERED. (By Telegraph—Press Associatiori.) AUCKLAND. August 16. Trading banks have been advised that the exchange authority has started issuing permits for the remittance of funds to pay for imports, and they have been supplied with a set of conditions. , ' Permits so far. issued in Auckland seem to have been confined to a comparatively small batch on Tuesday, and they were chiefly put through one trading bank. Assuming that the policy applied in these permits will be expressed generally in subsequent permits, importers express absolute bewilderment at the situation. Practically all of such permits, so far as can be ascertained by inquiry from holders, disclose a drastic rationing policy, in which remittances are spread into next year in order to conserve immediate sterling credits. Under this plan there is often postponement of major payments till after December 31, and it has been applied both in respect of finished goods and raw materials lor manufacturers. The reaction of importers is one of dismay not only at the immediate effect on their business, but also at the anticipated attitude of overseas suppliers. who are obviously expected by the Reserve Bank to extend credit often up to June next.. If they refuse to ship on such terms serious shortages of goods are expected to arise. Not more than one-third of the amount required for payment of goods in the current licensing period of mis year has been allocated in a substantial proportion of permits The remittance of the balance is spread by monthly instalments over the first half of next year.

Trading banks appear to bo no less surprised by the situation than importers. Apparently on the assumption that more generous allocation of funds would be made by the exchange authority than so far disclosed by permits, some made advances to meet commitments on goods that were shipped or that arrived during the period the Reserve Bank was considering applications. Some of the permits suggest that' they will be creditors on such transfers for months ahead.