OVERSEAS TRADE

Waikato Times, Volume 122, Issue 20496, 12 May 1938, Page 8

OVERSEAS TRADE

The trade returns for the financial year that closed on March 31 last showed an excess of experts over imports amounting to £6,943,000. That is the smallest favourable balance recorded since 1931, when there was a small excess of imports. Since then the balance in favour of the Dominion has touched £19,907,000, and the decline in four years to a sum not much more than one-third of that in 1933-34 should have the attention of the authorities. The financial year, admittedly, is not the best for purposes of comparison. It divides the producing season summarily, and a great deal may depend upon the run of shipping. If a few overseas boats should not get away until early in April then their cargoes appear in the returns for the new financial year, and they would make a substantial difference. The serious aspect of the position is that the returns for the first three quarters of the production year show an excess of imports, and although the June quarter usually sees exports at a! fairly high level it seems unlikely that the balance in favour of the Dominion will equal that of the previous year. The movements are of importance to the Government, and the people, for several reasons. One is that exports must exceed imports by a margin sufficient to meet debt services, pay for the invisible imports, such as freight and insurance, and provide for interest payments or remittances on private account. The amount required for interest alone has been estimated at from £10,000,000 to £12,000,000 and these items were stressed by the Minister of Finance when he discussed trade matters with the business leaders at Home. Mr Nash put the aggregate freight charges at £7,000,000, and these items must be provided for by an excess of exports over imports. If that is not done then there will develop a demand on the sterling exchange reserves held in London. Even the possibility of such a thing used to disturb Mr Nash when he occupied a seat on the Opposition benches. In the final session of the previous Parliament Mr Nash said: “We had a £6,900,000 surplus on the last twelve months, and whilst we have a fair surplus from other years to meet the deficiency, it is inadvisable to boast of our favourable trade balance. Another boast is that our imports are increasing, but if we have large imports, which are bolstering up our Customs revenue, it means that ultimately we are going to be short of funds, in spite of the fact that there is about £46,000,000 lying comparatively idle in London.” It would be interesting to have the views of the Minister on the position to-day. Imports have grown very rapidly, and the Customs revenue has reached record heights. That has made the revenue extremely buoyant, but the sterling holdings of the Reserve Bank at the end of March were only £18,326,000, a very substantial drop on previous years. If the Minister takes the financial year as the basis of his calculations then obviously the credit balance is not sufficient, on his own showing, to meet the items mentioned —interest, freight and private transfers. The calendar year gave an excess of exports amounting to £10,221,000, but the production year, which is the best for purposes of comparison, may show a comparatively small excess. In the past London holdings of sterling exchange have been lower than they were at March 31 last, but not at that time of the year. The export trade is at its maximum, and London funds should be building up steadily. This year they have declined a little in the past few weeks. The Minister of Finance should let his views be known. In the days when he was a critic of the Administration, and not a responsible Minister of the Crown, figures that compared more than favourably with those just issued were regarded by him as being unsatisfactory. What does he think of developments since he took office that have reduced the favourable trade balance of the country by about 45 per cent. 1