EXCHANGE FORCED UP.

Auckland Star, Volume LXIV, Issue 16, 20 January 1933, Page 8

EXCHANGE FORCED UP.

COERCION OF THE BANKS.

GOVERNMENT PERSISTS IN POLICY. RESIGNATION OF FINANCE MINISTER. CONSTERNATION IN AUCKLAND. Flying in the face of the expert advice and spirited opposition of the Associated Banks, and surrendering the support of its chief Minister, Cabinet has decided to have the exchange rate, New Zealand on London, increased to 25 per cent as from ,this morning. Concurrently with the announcement came confirmation of the resignation of the Hon. W. Downie Stewart, Minister of Finance, who has parted company with his colleagues on the ground that his continuance in the Ministry would be a source of embarrassment to the Government in its exchange inflationary policy. The decision to artificially peg the exchange by political intervention was received with consternation in the city, where commercial leaders described it as a panic measure, in the wake of which would follow increased taxation, increased expenditure on behalf of the State and local body overseas debt service, and a higher cost of living. A meeting of protest by business interests was held this afternoon at the Chamber of Commerce. Labour members of Parliament, while condemning the Government's action, congratulate Mr. Stewart on his courage, and suggest that the remainder of the Ministry might profitably follow his lead.