DISCRIMINATION IN EXCHANGE.

Auckland Star, Volume LXV, Issue 139, 14 June 1934, Page 6

DISCRIMINATION IN EXCHANGE.

Your editorial dealing with the tangle of anomaly and injustice into which the Government's policy of high exchange manipulation has led New Zealand should rouse the public conscience against the iniquity of the whole wretched business. The official explanation that the "bonus" is allowed—or the discretion of some individual .or individuals in high places behind cloeed doors,, deservedly provokes your remark that"it ie easy to imagine what scope.this may give for wire-pulling." How much "wire-pulling" has there already been from the very inception -of the wretched device of robbing Peter to pay Paul? Your question "Who is to decide?" is a very pertinent one. And what is to be the basis for "definition"? Is political colour to be considered? The public of New Zealand has good cause to be greatly alarmed. The recent allocation of Government art union funds was so grossly political that there was a public outcry. In its manipulation of the high exchange the Government has seized a cruel weapon by which it is flogging to desperation a large body of our best citizens. When further development of tr.ade with Britain was so mutually essential, it was outrageous that the New Zealand Government should torpedo the whole mercantile outfit by high exchange. Had it alternatively allowed exchange as a mechanism to fall into ite true place and perform its correct function as the handmaid of commerce, what a different story would have ensued. Mr. Larkworthy, a muchquoted authority on banking, postulates that a nation's real wealth should be made to work for its general prosperity This it can best do, he. affirms, "by . regulating the foreign exchanges, so that merchants, and manufacturers may trade abroad with no paralysing disquietude as to a fluctuation in exchange which might be ruinous. By planting our credits and securities abroad at the chief centres of the world we could stabilise the exchanges, and our credit and securities would be far better employed, obviously, •in thus keeping the exchanges round about par than in useless in the cellars of our banks." J ° A. J. STALLWORTHY.