ACTION CONDEMNED.

Auckland Star, Volume LXIV, Issue 18, 23 January 1933, Page 7

ACTION CONDEMNED.

" DELIBERATE INTIMATION." FREE KATE ADVOCATED. (By Telegraph.—Press Association.) WELLINGTON, Saturday. The action of the Government in deciding the new exchange rate was condemned by Mr. A. S. Burgess, president of the Associated Chambers of Commerce, to-day. The executive met to consider the exchange situation and at the end of the meeting Mr. Burgess made a statement. "The extraordinary attitude of the Government," he said, "in reversing the assurance given by the Prime Minister that the Government would not interfere with the rate of exchange, and that it would leave it with the banks to fix such a rate as supply and demand required in the ordinary way, is greatly to be deplored. "The raising of the rate of exchange by artificial means is. a deliberate act of inflation. It disregards economic considerations entirely and it will create false conditions just as would the artificial lowering of the rate_below its proper level. "The Associated Chambers of Commerce ' has from the beginning consistently advocated a free exchange rate, a;nd it is no more in favour of a rate that is artificially low than one that is artificially high. Apart from unjustifiable interference in what is obviously a banking function, the action of the Government in making this bargain with the banks is a direct violation of the spirit of Ottawa. % "While not going into the question of whether the principle is right or wrong to grant assistance to primary producers," said Mr. Burgess, "the method of using the exchange rate is. quite, wrong in principle. Under this system primary producers who are obtaining the' lowest prices for their produce are receiving the lowest benefit, while those who are receiving the highest prices for their produce are receiving the highest benefit. Therefore if any assistance is to be given, it should be on a more equitable basis. "I am firmly convinced that this action of the Government is going. to lead to further unemployment and a considerable increase in the cost of living."