8.—16.

The surplus for the year ended the 31st March, 1938, was several million pounds less than the favourable annual balance required to provide for Government and local bodies' debt service and other expenses overseas, in addition to the estimated amount of invisible items such as net tourist expenditure, commissions, interest, &c. The Dominion has thus been drawing upon its overseas resources during the year to a considerable extent. (Ib) Commodity Prices.—The rising tendency of prices noted last year has continued, as shown in the following table based on indices compiled by the Government Statistician. The slight decrease in the index number of export prices is due to a decline of 33 per cent, in the price of wool, largely offset by increases of 23 per cent, in dairy-produce prices and 9 per cent, in meat-prices. (Base 1909-1913=1000.)

(c) Business and Trade. —The following statistics, compiled by the Government Statistician, give some indication of the trend of business and trade during the year : —

(.d) General Survey. —The foregoing statistics indicate that the year ended March, 1938, was characterized by the maintenance of conditions of economic buoyancy. The increase in export values is due mainly to the higher level of prices for butter and cheese and to the fact that the year's figures include some of the higher values realized by wool during the 1936-37 season, which thus offset, to some extent, the recent fall in wool-prices. Farm production has been well maintained during the year, but there is at present, owing to unfavourable seasonal conditions, a slight falling-off in the production of butterfat. An important element in the economic development of New Zealand has been the fact that the products of expanding pastoral industries have found in Great Britain a secure market unhampered by restrictive trade policies. At the present time, when the channels of international trade are obstructed by the widespread adoption of restrictions on trade and foreign exchange, it is gratifying to note that New Zealand still holds a favourable position in the British market. During the past year 85-8 per cent, of the total exports of New Zealand were shipped to British countries, including 79-5 per cent, to Great Britain. The total value of imports increased considerably during the year, partly due to a rise in prices and partly to increased quantities. These additional imports were accounted for partly by increased consumption, but there was also a considerable building-up of importers' stocks of certain commodities. Notable increases in both value and quantities occurred in the imports of motor-vehicles, iron and steel goods, and machinery. An unusually large import was that of approximately 3,000,000 bushels of wheat, rendered necessary by the reduced yield of local wheat crops.

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Percentage Increase. March MWh~ Highest and Lowest T March, March, ' l0 «, 0 ' Points reached during Tndex - 1937. 1938. 1937 ' 1938 > Year ended over over 91 , M , irk00 March, March, 31st March - 1938 ' 1936. 1937. A. Wholesale — Highest. Lowest. Imported items .. .. 1383 1425 5-33 3-04 1425 1383 Locally produced items .. 1548 1605 6-98 3-68 1685 1548 Combined wholesale index .. 1472 1522 6-2 3-40 1565 1472 B. Export prices .. .. .. 1351 1345 12-21 0-44* 1563 1345 C. Retail prices .. .. .. 1538 1605 7-55 4-36 1620 1550 * Decrease.

Percentage Percentage Year ended Year ended Increase 1937 Increase 1938 31st March, 1937. 31st March, 1938. as compared as compared with 1936. with 1937. (000 omitted.) Exports (excluding specie) .. .. £(N.Z.) 60,235 £(N.Z.) 65,008 21-3 7-9 Imports (excluding specie) .. .. £(N.Z.) 47,621 £(N.Z.) 58,065 27-2 21-9 Sales tax.. .. .. .. £(N.Z.) 3,051 £(N.Z.) 3,519 23-6 15-3 Bank debits (excluding Government) £(N.Z.)874,020 £(N.Z.)957,212 22-6 9-5 Building permits (main towns) .. £(N.Z.) 5,433 £(N.Z.) 8,167 8-9 50-3 Railways — Revenue .. .. .. £(N.Z.) 6,904 £(N.Z.) 7,592 10-6 10-0 Number of passengers .. .. 21,235 22,441 4-3 5-7 Freight tonnage .. .. .. 6,814 7,516 10-1 10-3 Coastal cargo tonnage (inwards) .. 1,902 1,991 17-4 4-7 Number of motor-vehicles (licensed) .. 256 280 12-3 9-4