CURRENCY REFORM.

Auckland Star, Volume LXII, Issue 166, 16 July 1931, Page 20

CURRENCY REFORM.

SUPPORT FOR BILL.

"INDICATES THE DIRECTION"

VIEWS OF MR. A. C. A. SEXTON.

"The bill is more an indication of the direction which currency reform should take than a fully operative measure, largely because of the handicaps placed upon a private member's bill," said Mr. A. C. A. Sexton this morning in replying to criticism by Dr. E. P. Neale, concerning the Currency Bill, which is to be introduced to Parliament this session.

'•'Dr. Neale states that he fears that the stabilisation of export prices, such as provided for in the bill, would introduce more evils than it is intended to cure," said Mr. Sexton. "The cure would consist of giving dairy farmers from 1/5 to 1/0 a pound'for butterfat, and sheep farmers 1/3 a pound for wool. I know a great many farmers at the present time who would very much like to try the cure, and I think they would take the risk of its turning out worse than the evil of receiving lOd a pound for butterfat and 6d a pound for wool.

"Dr. Neale bases one of his arguments on the supposition that we are at present importing £50,000,000 worth of goods. If we are doing that, then it is about double what we should be importing, and it is time it was stopped. Recent estimates place the value of our exports for the past year at approximately £30,000,000. From this figure should be deducted about £8,000,000 for our interest and other charges overseas, leaving a balance of £28,000,000 to be spent on imports. This is a very different figure from the £50,000,000 mentioned by 'Dr. Neale. Moreover, the effect of stabilising the price level of our export commodities would be to stabilise very largely the prices of woollen articles manufactured in New Zealand, because wages and overhead expenses are now largely stabilised in money value. The value of our products for our secondary industries in New Zealand in 1928-29 amounted to about £43,000,000. If the bill became law we would have stabilisation in New Zealand of the primary products that we produce and consume, and also in the prices of all the products of our Secondary industries consumed in New Zealand.

Basis of Prosperity. "It is true," added Mr. Sextpn, "that a considerable proportion of the fluctuations in the prices of our primary products Avould, be transferred to our imported commodities, but the importer is in a better position to protect himself against such fluctuations than is the farmer, and, if necessary, he must have a higher rate of profit to protect himself. It may be true that imported goods are held in stock longer in NewZealand than the goods exported, hut the farmer "is a. long-term producer in that he has to plan hie operations over a very much longer period than does the importer. The prosperity of this country depends almost entirely on the farmer, and it is far more important that his operations should be put on a firm basis, and that he should be assured of a stable return, than that the importer should be assured of his position. In drawing -up his bill, Mr. H. G. R. Mason, M.P., would no doubt he seriously handicapped by the fact that it was a private member's bill, and he was called upon to keep within fairly strict bounds.

"Present System Inadequate." "Our present currency system, has proved, quite inadequate to enable the exchange: of goods and service which it is necessary, to carry on in a prosperous country," concluded Mr. Sexton. "New Zealand is full of food, clothing and everything .'that man requires, and men are able and! willing to work for them, •but the two apparently cannot be brought together. Many of our farmers are having a desperate struggle, and, if things do not improve, they will be forced off their farms. It is, therefore, quite time that some effort were made to meet the situation, and to give the Dominion as a. whole enough money to enable it to carry on its internal business. If the farmer gets 1/5 and 1/6 for his butter fat and 1/3 a lb for his wool, he will at once commence to spend money in the towns and set business going again. In the circumstances, who would worry if he had to pay more for imported goods 1"