THE REMEDY OF HIGH EXCHANGE.

Auckland Star, Volume LXIII, Issue 281, 26 November 1932, Page 8

THE REMEDY OF HIGH EXCHANGE.

The importers and the associations to which I they belong are greatly agitated on the question of exchange. Are they sure th«y have given it adequate thought? At first sight it is certainly unpleasant to pay. an increased rate of exchange, but it would.be even more unpleasant to import at the lower rate of exchange and find few customers. The farming community will-buy less next year than it'has done; this year, and farmers^ are growing steadily poorer. Mr. A. t>. McLeod says many of them will have to give up. the struggle. Elderly folk who live on incomes, not large at first, but becoming gradually less, will buy no thin "• beyond absolute necessaries, for Mr. Forbes is already foreshadowing a further reduction .of interest. There will be more unemployment, for business will be too dull to make it possible to maintain existing staffs. Where are importers to find purchasers for their goods? High exchange cannot be advocated on its merits, but it is certainly better than any of the alternatives offered. It is, of course, inflation, but there is no reason to be afraid of a word. We need not go to the lengths that Germany and France did. We have practised deflation until labourers are on relief, business men losing money, capitalists growing poorer, and the Government budgeting for a deficit. High exchange is a method of relieving producers at the expense of other classes; if the other classes will not submit there will be no producers,'and'then the other classes will realise that" they were unwise. As Mr; 'Keynes says, we'can balance our Budget at zero on either side, which is what we have been aiming at for two years past, with dire results. Should we not try another fack? . . S. GRAY,