EXCHANGE PROBLEM.

Auckland Star, Volume LXIII, Issue 59, 10 March 1932, Page 10

EXCHANGE PROBLEM.

EFFECT OF THE HIGH RATE. reactions at ottawa. Export bonus preferred. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, this day. ' A new viewpoint for a country member, and one differing sharply from the straight-out advocacy of a high pegged rate of exchange, was developed in the House yesterday afternoon by Mr. H. G. Dickie (Coalition Reform, Patea), who, while raising no objection to exchange running free, contended that the fairest method would be by the provision of an export bohus in accordance with the state of the primary industries.

Mr. Dickie prefaced his references to the subject by asking what the effect would be on the forthcoming discussions at Ottawa if the exchange went up. South Africa and Canada, he pointed out, were on the gold basis, and these countries would have a perfect right to draw attention to the fact that Australia and New Zealand —assuming a 30 per cent rate of exchange prevailed-—were putting up a barrier to free trade with Britain to the extent of a 30 per cent surcharge against her goods. "And they would have the right to ask for preferential treatment as against those countries," he added. Misuse of New Zealand Funds. Mr. Dickie went on to say that he had no objection to letting exchange go free to find its natural level, though some safeguards would have to be imposed to prevent New Zealand funds being used for other than the benefit of our own people. High exchange would be regarded as a bonus to our producers, many of whom were in desperate straits, but to give a bonus through high pegged rates would mean that one portion of tho farming industry which happenedto bo in a fairly good position would receive exactly the same'.assistance as the section almost on the verge of bankruptcy. All products were on a low level, but the dairy farmer was in a better position than the sheep farmer. An exchange rate of 30 per cent would mean only a halfpenny per lb extra for the wool grower, but it would enable the dairy farmer to <*ct twopence per lb extra for his butterfat. "The fairest way," said Mr. Dickie, 'is to give an export bonus according to the state of those industries, although at the same time I have no objection to exchange running free." He agreed with the suggestions that a false high rate would mean an increase in the cost of living. Professor Copland Criticised. Turning to the Economists Committee's report, Mr. Dickie expressed surprise that Professor Copland had been appointed to tho committee, for he had come over hare in the employ of a banking institution. The Rt. Horn J. G. Coatcs: No. Mr. Dickie: The Minister says that is not correct, but I will say that he came over last year in the employ of that institution. A Labour Member: That is correct. Mr. Dickie added that on the latter occasion, in a conversation with Professor Copland, he found that the visitor condemned inflation because if a further crisis arose, more inflation would be resorted to. Mr. R. A. Wright (Coalition Reform, Wellington Suburbs): Now he advocates Mr. Dickie:'l do not know ; This report makes no recommendations, but states certain cases, and leaves it to our judgment whether we take it or leave it. There is no recommendation.