Wairarapa Times-Age TUESDAY, MARCH 30, 1943. NEED OF STERLING FUNDS.

Wairarapa Times-Age, 30 March 1943, Page 2

Wairarapa Times-Age TUESDAY, MARCH 30, 1943. NEED OF STERLING FUNDS.

ALTHOUGH the Avar has yet to be won, and according to the Australian Prime Minister (Mr. Curtin) is likely to last for another three years, a point of practical importance was made by the Provincial President of the Farmers’ Union (Mr. Hugh Morrison) when lie observed at a meeting of the executive of that organisation yesterday that: “The new order about wlpch we are hearing so much today is dependent on our sterling funds.”

With the end of the Avar perhaps still distant, this may not seem to be of much immediate interest, but the management of national economic affairs and finances during the war period, whatever its remaining duration may be,’ of course will influence very vitally the conditions in which this country enters on the post-war period. Thanks to the restrictions imposed on ordinary import trade and to remarkably high " returns for exports—the record figure of £80,000,000 being attained last year—and in spite of heavy payments of oversea war expenses having been met, the Dominion’s present balance of sterling funds in London is decidedly healthy. Information is not available as to the volume of Avar expenses yet to be brought to charge which must be set against the sum of £40,000,000 mentioned by Mr. Morrison yesterday, but substantial sterling balances are being built up and it is most desirable that the process should continue.

Without prejudice,,to the fact that it is and will be open to the Dominion to do a great deal to strengthen its economy by an internal expansion of industry and trade —an expansion of which Mr. Morrison, with some other representatives of the primary producers, is a convinced and earnest advocate —it is obvious that the possession of substantial sterling balances in London will do a great deal to assist this country on its postwar way. As Mr. Morrison pointed out, it is only from sterling funds, representing returns from export trade, that we can pay for imports or make external payments of any kind, including annual debt charges or the repayment of external debt,

To what extent the regulation of imports will have to be continued after the Avar, in order that the best and most provident use may be made of sterling funds, is a matter that will call evidently for very careful consideration. Obviously it will be desirable to reduce to a practicable minimum the amount of external war debt to be left outstanding when the war is over. A choice may also have to be made at that stage betAveen consumers’ goods and capital goods and raw materials needed for the expansion of industry within the Dominion.

There can be no doubt in any case that it is very much in the interests of all sections in the Dominion that the greatest possible expansion of primary export trade should be achieved and maintained. At present there is a good market for all the produce that can be shipped away from the Dominion and those engaged in primary production are fairly entitled to thecredit of having risen to the occasion remarkably, in spite of difficulties among which labour shortage is conspicuous, though it is far from standing alone.

Very different conditions may arise in the post-war period. For a time the position may be dominated by an unsatisfied demand throughout the world for food and other commodities, but at a'longer view factors like the permanent expansion of British agriculture now being planned may greatly affect New Zealand and other Dominions. Against this is to be set, how* ever, the hope of a considerable easing of restrictions on world trade and the introduction of new methods, such as dehydration and modern developments in refrigeration, which may do a good deal to facilitate a wider and more economical distribution of perishable produce.

,In order to build up its population and attain economic and political security, New Zealand must maintain the high level of export trade which will give it adequate sterling balances and at the same time attain a more varied development and expansion of internal industry.