Institute of Pacific Relations

New Zealand Extends Import RestrictionsAuthor(s): Jack ShepherdSource: Far Eastern Survey, Vol. 8, No. 24 (Dec. 6, 1939), pp. 286-287Published by: Institute of Pacific RelationsStable URL: http://www.jstor.org/stable/3022299 .

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286 New Zealand Extends Import Restrictions December 6

tween Chungking and Alma-Ata, the capital of Kazakh? stan (situated on the Siberian-Turkestan Railway), via Hami in Sinkiang. The Chungking authorities an? nounced on November 9 that preparations have been

completed for the initiation of a regular service on this

projected air line, to be operated by the Minister of

Communications, and that the Eurasia Aviation Co. will act as agent. If this plan materializes, nationalist China will have another link with Europe, one which will be little affected by either the war in Europe or by any possible future Japanese actions against Hongkong or Indo-China.

The importance of all of these air lines to nationalist China can hardly be overstressed. They provide the only existing method of rapid transportation. Many govern? ment departments, including the Ministry of Com? munications and the Bank of China, have two standing reservations on every outgoing plane. Propaganda ma?

terials, of inestimable importance in gaining support for China and in counteracting any anti-Chinese propa? ganda, are flown out of the interior. Chinese liberty bonds which are playing a major role in financing China's resistance and reconstruction and which must

find their way to purchasers in occupied China, espe? cially to Shanghai and buyers in foreign countries, have been transported by airplanes as the quickest and safest method of conveyance. Similarly, the banknotes of the National Government are transported by planes since they must be supplied in adequate amounts to the outside world if they are to retain their relatively firm position. Finally, even nationalist China's knowl-

edge of what is happening in the outside world depends largely on the flight of the plane.

That the present dependence on the airplane will have results of long-term significance appears quite certain. American experience in South America and the

Philippines, and British experience both in New Guinea and western Canada, have demonstrated the feasibility of employing air transport facilities to open up new

enterprises, particularly in mining areas otherwise inac-

cessible, or accessible only at prohibitive cost. Even

now, there is already talk of exploiting the gold fields of eastern Tibet with the most modern means of trans?

port. Air-consciousness in China, born of political and

military necessity, is probably there to stay. Irving S. Friedman.

NEW ZEALAND EXTENDS IMPORT RESTRICTIONS

Deprived already of imported wines, spirits, tobacco, cigarettes and cigars by government restrictions effec? tive since the beginning of July, New Zealanders have now been warned that in the first half of 1940, over? seas supplies of simpler luxuries such as chewing gum, cocoa, sauces and soap will also be totally cut off.

According to press reports some 330 items have now been placed on the list of prohibited imports.

The latest restrictions represent an intensification of the government's effort to conserve and if possible increase New Zealand's supply of sterling exchange which had dwindled alarmingly during 1938. Re-elected in November 1938 with a greatly increased majority on a platform pledging it to continue and extend the

program of far-reaching social and economic reforms which it had inaugurated during its first three years of

office, the Labor Government found itself faced with a serious financial problem demanding drastic action. As a result of a fall in export prices and a heavy in? crease in imports, sterling funds held by the Reserve Bank and by trading banks in London had declined from ?NZ34.6 million in November 1938 to ?NZ28.1 million in May 1938; and in the following six months there came a rapid fall of some eighteen million pounds. By the end of November there remained only about

eight million pounds of credits available for meeting interest payments on government and local debts and for the purchase of necessary imports. Fixed interest

charges alone amount annually to some ?NZ9 million and in addition a government loan of ?NZ17 million

was due for payment in London at the beginning of 1940.

To meet this situation the government introduced a

system of import licensing and Reserve Bank control of all sterling funds. The government's policy was de? scribed by Finance Minister Walter Nash as one of

import selection "whereby the Government would de- cide that the sterling funds available should be used for the most urgent needs: first, to pay our debts; secondly, to bring into this country the raw material and equipment necessary for New Zealand industries; thirdly, to bring in necessary consumers' goods but to exclude goods which for a time we could go without or which New Zealand could produce."

Despite the restrictions applied through the licensing system and centralized control of sterling funds, im?

ports during the first half of 1939 were greater than had been expected and seemed likely to use up a large part of the exchange funds built up during the export season. It therefore became necessary to make the restrictions on imports even more severe during the second half of the year; hence the ban on imports of

liquor and tobacco mentioned above. Carpets and lin-

oleums, preserved fruit, fish and meat were also among the items in which a 100% reduction of imports was

required and drastic limitations were placed upon the

importation of many other commodities. Even these stern measures have led to no marked

improvement in the exchange position this year al?

though further rapid deterioration has been prevented.

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1939 Philippines Improving Transportation Facilities 287

The position is still regarded as being serious enough to warrant an extension of import prohibitions during the coming year. The problem was somewhat eased in

July when the Finance Minister on a visit to London

arranged for an export credit of ?5,000,000 from the United Kingdom for New Zealand Government pur? chases for defense and other purposes, and ?4,000,000 short-term credits for private import transactions. Any additional help which might result from British pur? chases of wartime supplies from New Zealand (see Far Eastern Survey, Oct. 11, 1939, p. 233) is likely to be offset by the heavy expenditures involved in New Zealand's own military effort.

While the more drastic features of the New Zealand

Government's present program of import restriction are of an emergency character and will probably be retained only until the exchange situation improves, it must not be assumed that the whole policy is merely a temporary expedient. As Mr. Ian Milner has pointed out in a recent study of New Zealand's Interests and Policies in the Far East, "exchange control is claimed as the logical development of the Government's long- declared plan for building a more 'balanced economy' . . . The New Zealand Government . . . has adopted exchange control as the most appropriate method of

providing for the expansion of secondary industries, as well as for the purpose of building up sterling funds."

Jack Shepherd

PHILIPPINES IMPROVING TRANSPORTATION FACILITIES

The last ten years have seen a vast improvement in

transportation facilities in the Philippines with the extension of good highways, a further development of

railways in the island of Luzon and the introduction of regular air service between distant points in the islands. Changing conditions in the country, urgent need for more rapid development, are likely to see a new emphasis in the government's plans, and this is

already apparent in the increasing attention given to the construction of new or improved highways.

Actual highway mileage has increased by 50% in the last ten years and the greater part of the new roads are listed as first-class. At the end of 1938, there were

nearly 12,000 miles of highways in the country, of which about one quarter were concrete, macadam, or surface treated. Half of the total mileage is classified as national highways, half as provincial. About one thousand miles were constructed during 1938, of which one third were first-class. When it is considered, how?

ever, that this network has to service a land area of some 114,000 square miles, it is apparent that the

country still lacks an adequate road system. The

Philippines compares favorably with such Far Eastern countries as China, which has probably only 60,000 miles of roads over its vast area, or Netherlands India, which has only 40,000 miles of roads for 735,000 square miles of territory. At the other end of the scale, New York State, which comprises 47,600 square miles, has

84,000 miles of highway outside of New York City, and of these over 52,000 miles are surfaced.

A striking example of the lack of development of the

Philippines in this respect is seen in Mindanao, where the government is undertaking a new settlement pro? gram on a large scale. This is the second largest island in the Commonwealth, including with Sulu an area of some 37,000 square miles, yet at the end of 1938 it counted only some 1,500 miles of highway. That this situation has been partly responsible for the slow mi?

gration from the densely populated islands to the north, has been recognized by the government, and road build-

ing has been made an integral part of the new scheme to transport settlers to these undeveloped lands. Here

emphasis is being placed on third-class roads, with a view to opening up the country as quickly as possible. Original plans for building an electric railway have been definitely shelved in favor of wider development of roads, providing access from the inland agricultural areas to distribution centers. There is at present no

railway in Mindanao, except for a few private lines in lumber and hemp concessions, and in the penal colonies.

Along with the extension of highways throughout the islands, motor transportation has not lagged far behind. At the end of 1938 there were nearly 52,000 cars registered throughout the provinces, compared with 32,000 ten years ago. There were 273 bus com?

panies, operating nearly 5,000 motor units. Regular passenger service over these lines is scheduled in all but a few cases. Rates vary from one to three centavos

per kilometer (less than half a cent to over one cent

per mile); in two cases the rates run as high as 4 centavos per kilometer. Estimates of the total number of passengers carried over these lines are lacking but it is beyond question that they furnish the most con- venient country-wide method of transportation for the

population. An interesting comment on the need for more ade?

quate bus facilities appeared in the Philippines Herald some weeks ago. During September it is still a common

sight to see thousands of Ilocanos trudging along the

Bangui-Claveria road on the northwest shore of Luzon, on their way to work in the rice fields of the Cagayan Valley. About 6,000 of these migrants make the trip every year, returning home in March and April after the harvest. Most of them have to walk for there is

only one bus company operating to Cagayan via Ilocos, and its facilities are woefully inadequate to accommo- date the thousands of seasonal workers who would be able and willing to pay the required fares.

The automobile gives far more promise than the

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