Import Anomalies

Waikato Times, Volume 125, Issue 20911, 16 September 1939, Page 6

Import Anomalies

GOODS IN DOMINION FINANCIAL POLICY BLAMED WAR ALSO HAS AN ETFEOT HIGIIER PRICES, SHORTER STOCKS Increases In the retail prlcea In Naw Zealand of gooda Imported from Oreat Britain reaultlng from the fell In London credits have been accentuated since the outbreak of war by Inereeaea In frelghta and war Inauranoa rlaka, which the importer will have to paea on to the public. Moreover, the supply of gooda la likely to bo curtailed considerably. A Hamilton retailer received notification today fro-m a prominent New Zealand importing establishment that the Reserve Bank of New Zealand had informed the firm that sterling funds cannot l>e provided for overseas payment of imports except on a deferred system. This means that although licences to import were granted to the indent firm to import goods up to December of this year, the Reserve Bank has authorised approximately 20 per cent only of the funds required. The balance of the sterling funds has beeD spread over the period from January to June of next year. Extra Commltmenta A number of manufacturer* overseas. however, shipped the goods to the New Zealand Importers, but it will be months before the funds can be remitted to them. Until the funds are remitted the New Zealand firm has been obliged to give the bank a guarantee that it will pay anv alteration in the exchange rate, conversion rate, and Interest on tile amounts until the time of remittance. The position is, therefore, that although the importer in New Zealand has actually landed the goods he cannot arrive at a correct cost. When an importer sells goods to a retailer on an indent basis it is necessary that the retailer should know what the goods wdll cost him. The only method, therefore, under which the Importer can Invoice the goods is at a price which should be charged to the retailer under normal condition*. No Deelre to Profit "We ourselves do not wish to profit at our clients’ expense,’’ stated the importing firm to the Hamilton retailer, “but you will understand that under the conditions which have been b-eiKrht about by the Government's financial policy we have no alternative but to protect ourselves in some way against the loss to which we have committed ourselves in the Indemnity we have had to give to the bank on these goods,” The firm has been foreed to ask all It* clients to agree to on Imposition of a surcharge of 71 per cent on oil indents which have boon shipped on a collection basis after September 1. When the funds ore remitted on those shlrx.snts an adjustment will bo made and any refund duo would be paid. Whether the position will be titered following the statement made yesterday in the House of Representatives by the Minister of Finance, the Hon. W. Nash, regarding the utilisation of export credits, is not known. The Hamilton retailer concerned Is of the opinion that the 7} per cent surcharge may be reduced somewhat, although It would almost certainly be retained In some degree, as the fact that the English exporter had to wait three months for 75 per cent of his payment would mean that considerable Interest would be added to the cost of the goods. Even If the exporter In the United Kingdom arranged Immediate finance with his bankers In London as suggested by the Minister, that would be in the form of an overdraft and would still call for an interest payment. Effect of Shifting Dollar All wire-netting prices quoted from England to Dominion importers have been withdrawn since the outbreak of war All freight rates from the United Kingdom have been advanced 25 per cent and the war risk rate lias been advanced to 100 s per cent. Taking these advances Into consideration, the New Zealand importing firm referred to above, has assumed that within the next month all English goods landing in New Zealand will show an advance in price of approximately 20 per cent. American goods will be altered considerably in price also as the result of the shifting rate of the dollar during the last few days. Though some people ridicule the likelihood of a shortage of stocks, the importers point out that the new restrictions brought Into operation at the beginning of this week in an effort to conserve overseas sterling funds will reduce Imports of Canadian and American goods by at least 25 per cent. To add further to the likely shortage, German goods will naturally go off the market as the result of the war. No money can be remitted to Geimany.