Currency Difficulties

Attempt To Overcome N. Caledonia's Currency Difficulties

AN important arrangement has been reached between the French Gov ernment and New Caledonia. Prance will now regulate, on a quarterly basis, in francs convertible into foreign cur rency, her commercial balance with the Colony, and the amounts thus liberated may be used to finance purchases by New Caledonia from foreign countries. These are, mainly, Australia and the USA.

In addition, in order to allow the Colony to cover trade deficits with foreign countries, New Caledonia is authorised to dispose of her reserve of foreign cur rency over and above the sums received from France, as detailed above.

New Caledonia will be obliged, as in the past, to submit to the Commission des Approvisionnements at Paris a quar terly export and import schedule, which means that France will continue to exer cise control over local trade.

The position is that the colony has at present a favourable trade balance with France and an unfavourable balance with her other principal trading countries. The latter deficit is serious because of the grave slump in the production of nickel matte.

The future of New Caledonia depends on nickel export, and it is for this reason that General Macarthur is being asked to allow 5,000 or 6,000 Japanese coolie labourers to be sent to the Colony under the kind of pre-war contracts which brought in so much cheap Javanese and Indo-Chinese labour. The most serious objection to this move is expected from Australia and New Zealand. France can, however, point out that she could take more New Caledonia nickel matte and that this would stimulate European industrial production and allow France to increase her exports within the French Union.

New Caledonia’s favourable balance with France is shown in the following table:—

1946 1947 Exports .. .. 173,266,000 f. 50,965,000 f.

Imports .. . 36,392,000 f. 42,340,000 f.

Balance in favour of the Colony 136.874,000 f. 8,625,000 f.