IMPORTS & FINANCE

Wairarapa Times-Age, 26 April 1941, Page 3

IMPORTS & FINANCE

POSITION OF DOAIINION NEED OF CONTINUED RESTRICTIONS. FINANCE MINISTER CITES LONDON COMMENT. (By Telegraph—Press Association.) WELLINGTON, This Day. Commenting on the great improvement that had been brought about in New Zealand's balance of overseas payments since the adoption of the policy of exchange control and import selection in December, 1939, the Minister of Finance (Mr Nash) remarked today that he had just received from the' High Commissioner in London a copy of an article which appeared in the financial columns of the London “Times” of February 18 last. The views which “The Times” expressed and which the British financial Press generally has reflected in its recent comments on Dominion finances clearly indicate, said Mi- Nash, that financial opinion in London is very favourably impressed with the success that has attended this Government’s efforts to build up New Zealand’s sterling balances and strengthen the war effort. After referring to the fact that as a result of the favourable trade balance for 1940, New Zealand had been able to effect a vast improvement in her own financial position the article proceeds to point out —“A result of this improvement in the trade balance is, of .course, a large increase in the net oversea assets, represented mainly , by sterling balances held by the Reserve Bank and the trading banks. The latest available figures indicate that these are now almost back to the level at which they stood at the end of 1937 before they began to be depleted by the serious flight of capital which occurred the following year. Repeated warnings have been given, both in this country and in New Zealand itself, that this tremendous improvement in the level of the oversea assets must not be taken at its face value, and that it must not be assumed that all New Zealand’s financial troubles are over and that she can now safely proceed to squander the reserves which have been carefully built up by the policy of exchange control.” “The warning given,” stated the Minister, “has been repeatedly sounded by the New Zealand Government in response to the pressure that is continually being brought to bear by interested parties who see in the Dominion’s increased sterling reserve sufficient justification for relaxing restrictions on imports and overseas remittances. While it is true,” the Minister continued, “that the crisis which threatened towards the end of 1938 was successfully surmounted, the sterling position must now’ be considered in the light of the war situation. Apart from the fact that the present level of the Dominion’s overseas funds, although satisfactory, is still no more than barely adequate, the prospect of a de- . creasing export income, on the one ' hand, and increasing war commitments, on the other, makes it more than ever ■ imperative that the funds available should be used as sparingly as possible for other than essential purposes. In fact, even were unlimited funds available, it would be just as necessary to curtail imports to a minimum as a ' war measure.”