BANKS OVER-RULED.

Auckland Star, Volume LXIV, Issue 81, 6 April 1933, Page 5

BANKS OVER-RULED.

RATE OF EXCHANGE.

FIJI GOVERNMENT ACTS.

PRICE OF COPRA REDUCED. (From Our Own Correspondent.) SUVA, March 30. Drastic action has been taken by the acting-Governor, after consultation with the Secretary of-State, to fix the rate of exchange at a rate less than half that recently announced by the trading banks. In the past the complaint has been heard that the banks dictated policies to the Government. Now the boot appears to be on the other foot.

A short time ago the banks announced that they were forced to accept the decision of the New Zealand Government, which had raised the exchange rate between the Dominion and London to 25 per cent. A special meeting of the Legislative Council was called, at which the acting-Governor, the Hon. A. W. Seymour, V.D., said he was surprised at the action of the banks in 'raising the exchange rate as between Fiji and London, to a par with that obtaining between New Zealand and London, without in any way consulting the Fiji Government. He said he was in correspondence with the British Government on the subject, and spoke strongly .against the banks' action. Rate of £111 Fixed.

I The matter came up again on Tuesday last, when the acting-Governor convened a special sitting of the Legislative Council, at which the following motion, proposed by the acting-Colonial Secretary, and seconded by tlio Colonial Treasurer, was carried without opposition. It read as follows:—"That, in the opinion of this Council, it is expedient that the rate of exchange between Fiji and London should bo stabilised, and the Commissioners of Currency should accordingly offer to buy and sell, in exchange for their own notes, drafts or telegraphic transfers on London for sums of not less than £5000 at the rate of £111 Fiji per £100 sterling, subject to reasonable commissions, to be fixed by the commissioners and, in the case of telegraphic transfers, not exceeding 1 per cent either way, and that an ordinance should be passed as early as possible validating any action taken by the commissioners in pursuance of this resolution, and establishing the system on an obligatory basis."

Sir Henry Scott warned the Government that financial chaos might follow unless great care was exercised. He urged the closest co-operation with the banks.

In reply, his Excellency said that the Government desired the greatest cooperation with the banks, and he intended to get into touch witli the banks as early as possible to work out a scheme. He believed the banks would adjust themselves to the position with regard to applicants desiring to exchange sums of less than £5000.

Decision Well Received. Up to the time of writing no announcement has been made by either local bank, but the commissioners have already printed draft forms and accepted business. It is likely that business firms will arrange with smaller men to finance them through the commissioners. The prompt action is accepted with great good feeling among all classes, although there are those who think that the "small man," who is really hit most by the 25 per cent rates should have received some definite consideration by the Government.

One immediate result of the fall has* beSn a serious drop in the local buying price of copra, of about 30/ per ton, the local price now being £0 10/ per ton, against £8 12/G a week ago.