RISING PRICES

Wanganui Chronicle, Volume 83, Issue 31, 7 February 1939, Page 3

RISING PRICES

GENERAL MERCHANDISE BRITISH FIRMS WITHDAW EXCHANGE ALLOWANCE L Per Press Association.] DUNEDIN, Feb. 5. An increase in the prices o£ 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 to-day, the manager of a local 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 a rate of 25 per cent. In this way they had kept costs down and saved an increase in prices of goods but 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 was the reason for the British firms taking this step. The opinion was expressed that other firms would soon follow the lead of those who had already closed down on their exchange allowances. For some time past they had stood the cost of the exchange in the hope that the percentage rate would be reduced. Some firms had placed money in the Dominion while a few of the principal concerns had taken the opportunity to transfer capital to Great Britain.