ONLY TOPIC.

Auckland Star, Volume LXIV, Issue 17, 21 January 1933, Page 11

ONLY TOPIC.

EXCHANGE STIR.

CONFUSION IN CITY.

UNCERTAINTY of future.

COST OF XJVING HIGHER.

Kothing has caused such a stir for years; everyone in Auckland was talking exchange to-day. City business people spoke disgustedly of the sudden turn things have taken owing to the amazing change of front on the part of the Government. The most salient point about the whole thing is the utter confusion in which business people have been thrown, and no one seems to know exactly what is going to happen next.

"Prices must go up, and the cost of livin" will follow," said one merchant this "morning. "That is the only clear an d unmistakable thing about the whole confusing business. Food, clothing, everything we use, in fact, will be dearer, and rates will be heavier. The inevitable thing will be that the people on wages will be asking for more money to enable them to live, but where it is coming from I cannot for the life of me suggest." Prices on the Move. People in business were puzzled this morning as to how prices were going to be affected, and many of them frankly confessed that they had not the faintest idea* of exactly how they stood. In £ ome trades prices were definitely advanced this morning. Hardware, for instance, has gone up 20 per cent, and the oil and colour merchants have notified an advance of 12} per cent. In the grocery trade, a most important one from the point of view of cost of living, there has been no notification of an immediate advance in price, but a prominent business man explained that they would be affected as the goods were replaced, and there would inevitably be an advance.

Butter has gone up a penny a pound from to-day. In the softgoods trade it is stated there will be 110 immediate alteration, but costs will inevitably ■be affected when it comes to replacing stocks. Retail meat prices will be advanced next week. Crisis Reached. Opinions among merchants and traders indicated that the general feeling in the city was that the Government's surprising action would bring matters to a crisis. They fully expect that when the Government introduces the bill to indemnify the banks against loss as a result of the higher exchange there will be a fight such as has never been seen in Parliament, and some observers even say that they would not be a bit surprised if the Government fell as the result of its dangerous tampering with the exchange rate. One merchant said matters were bound to reach a state -where something definite would have to be done to save the country, and ho predicted that New Zealand would see something very like what happened in England when the : Labour Government wr'U..forced out of office, and there was a Coalition of the best brains in the country to save Great Britain. Taxpayers Suffer. The manager of a leading mercantile institution said the major portion of the wool sold at the recent sales in Wellington, Napier and Wanganui had not yet been paid for, so that the clients of buyers, not the farmers, would get the benefit of the exchange increment. "It is,-" he said, "like making a present to woolbuyers at the other end of the world of 10,000 bales at the expense of the New Zealand taxpayer,_ who will ultimately have to foot the bill." In regard to the frozen meat trade, he said very extensive purchases had been made for the season's output, and here again the buying firms, not the farmer, would reap the benefit. With butter, however, it was different. The bulk of the butter was sent Home on consignment, and the dairy farmer would obtain the full benefit of the addition to the exchange rate on the bulk of the season's output and surplus in London.

DOMINION'S TARIFF. PROPOSED ADJUSTMENTS. PROMISED INQUIRY , SHORTLY. (By Telegraph.—Own Correspondent.) WELLINGTON, this day. " 1 In the near future the Government is to make the inquiry into the Dominion's tariff promised by New Zealand in the agreement with Great Britain signed at Ottawa, according to a statement made yesterday by the Prime Minister, Rt. Hon. G. W. Forbes. The Prime Minister said that in accordance with the terms of the agreement United Kingdom producers would he given an opportunity of putting forward their views, and that steps would be taken to afford facilities through the British Trade Commissioner, who would communicate with the British producers. New Zealand was committed by the Ottawa agreement to the principle that protection by tariffs should be afforded against United Kingdom products only to those industries which were reasonably assured of success. Further, the New Zealand Government had undertaken to institute an inquiry into existing protective duties and, where necessary, to reduce them without delay to such a level as would place the United Kingdom producer in the position of a domestic competitor. Owing to other business Cabinet lately has been unable to find time to consider the tariff question, although it is Understood that already some preliminary work has been done.

HARDWARE PRICES. ADVANCE OF 15 PER CENT. (By Telegraph.—Own Correspondent.) WELLINGTON, this day. It is authoritatively stated that some merchants advanced the price of wire and iron yesterday by 15 per cent, making a total increase of 25 per cent since the rate of exchange was first advanced. It is pointed out that as the farmer will now have to pay 15 per cent more fop these two commodities, which he "very largely uses, the' "rake-off" from the farmer's present-day gains has started seriously already. .