STERLING FUNDS

Wairarapa Times-Age, 18 August 1939, Page 5

STERLING FUNDS

arrangements to meet TRADING NEEDS ACTING-PRIME MINISTER REVIEWS POSITION. RATIONING OF AVAILABLE RESOURCES. (By Telegraph—Press Association.) WELLINGTON. This Day. Arrangements under which sterling exchange will be made available to importers as their import licences become valid were announced in an interview last evening by the acting Prime Minister, Mr Fraser. From representations that had been made to the Government, said Mr Fraser, it appeared that there was considerable misunderstanding of the arrangements made- through the Reserve Bank for the allocation of overseas funds. "Ai present import licences are in excess of the amount of overseas funds immediately available, and importers have been handicapped by the uncertainty as to when overseas funds can be provided,” said Mr Fraser. “To remove the uncertainty and make the best possible use of available resources the statistics of import licences already granted or likely to be granted during 1939 have been grouped into broad classes such as national security and health, export industries and domestic industries. The figures so assembled have provided a basis to be used by the Reserve Bank in issuing to importers remittance authorities definitely fixing the months within which any particular importer will be able to obtain from his trading bank the overseas funds to pay for imports included in any import licence. BASIS OF ALLOCATION. "In fixing the basis for allocation of funds accruing to the Dominion month by month, some measure of preference in respect of funds available up to December next has been accorded to the more essential classes of imports from a national point of view. The authorities, however, will cover the whole of the import licences, the portion that cannot be provided for by December being covered by allocation for various months from January to June of 1940. If some of the goods are not actually required between now and December arrangements can be made for the goods to reach the Dominion when required during the first half of 1940, as the currency of the licences has already been extended till June, 1940. “A point I would like to stress,” said Mr Fraser, “is that the remittance authorities represent an assurance from the Reserve Bank that oversea credits will be made available to importers in the particular months indicated in the authorities. This assurance should where necessary,. enable importers generally to make arrangements with oversea firms for goods to be shipped when required on terms providing for payment in accord with the remittance authorities. In other words, as soon as importers receive their authorities, they will be in a position to make definite arrangements for payment for goods. BRITISH EXPORT CREDITS. "In cases where payment for imports from the United Kingdom has to be made later the arrangements recently made in London by Mr Nash will assist in overcoming any difficulties that may arise. There arrangements include guarantee of commercial credits up to £4,000,000 sterling. Accordingly, it is open to a British exporter who desires to obtain payment before the time named in remittance autnority to obtain a guarantee from the Export Credit Guarantee Department and with this he should have no difficulty in obtaining from his own bank accommodation at least to the extent of 75 per cent of the amount involved. “The export credit facilities -are, of course, available only for imports from the United Kingdom, but in some cases, where difficulties arise in arranging importation from other countries on a basis of payment being partly delayed for a few months, it will be possible to obtain the gbods from the United Kingdom. On this point I may say that the holder of a licence to import from any other country is at liberty to import the goods covered by the licence from the United Kingdom. RELATIVE URGENCY. “In issuing remittance authorities, the Reserve Bank has regard first to the national interests of the Dominion, and secondly within the same class of imports, to the relative urgency of the needs of individual importers so far as they can be judged on the information available. Generally, the arrangements have been kept as flexible as possible, in order to obtain the maximum benefits from oversea funds as they accrue month by month. In some cases a position may arise where a local manufacturer is able to make satisfactory arrangements for the bulk of his raw materials, but is held up through not being able to arrange for necessary supplies of a particular commodity. In such cases the circumstances should be reported to the trading bank with which the importer deals, for reference to the Reserve Bank if necessary, when every endeavour will be made to overcome the difficulty. ' “Generally any cases of real difficulty or hardship arising out of these arrangements will be dealt with as sympathetically as possible, but active co-operation on the part of all importers will greatly facilitate the smooth working of the whole system.”