URGENT REASONS!

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

URGENT REASONS!

DEFENCE OF DECISION. " BENEFIT TO COMMUNITY." WELLINGTON, Thursday. The statement of the Prime Minister, Rt. Hon. G. W. Forbes (which announced the decision of Cabinet) set out that following the adjournment of Parliament, the Government had been exhaustively ' reviewing the economic and financial position of the Dominion and particularly the serious predicament in which primary producers found themselves as a result of the further disastrous fall in export prices. A comprehensive, review of the economic state of the country during the past year had been made and that indicated the serious nature of the position and also, that it was becoming increasingly difficult. Indemnity Undertaking. In the light of the information thus disclosed and as a result of a close survey of the position by the Government, it had decided that it was in the best interests of the country that the New Zealand-London rate of exchange for telegraphic transfers should be raised to *125 at the earliest possible moment, other-ratee to be raised correspondingly. The Government had further arranged with the commercial banks trading in New Zealand to co-operate with the Government in giving effect to this decision. At the same time, an undertaking had been given to indemnify the banks against any losses that must be incurred on the sale of exchange purchased at that figure. "Action Justified.'' "The Government recognises the farreaching nature of tlio decision which has been taken," said Mr. Forbes. "The position of the Dominion to-day and the sad plight*of so many of our citizens, farmers and unemployed workers especially, renders it imperative that some measure of relief should be immediately forthcoming, and for these urgent reasons Cabinet believes that its action in this emergency is justified. It feels that the present difficult position will be thereby eased and that some of the hardships of excessive deflation will be avoided. The relief thus afforded will, in the opinion of the Government, result in mitigating the, present unemployment position and,, moreover, will assist in bringing about "a much-needed impetus to industry. . ; . "It is with sincere conviction that the proposed rate ;of exchange will benefit the community as ■; a _ whole that the Government commends this course of return to the goodw.ill of the people of the Dominion."