PRICES AND COSTS.

Auckland Star, Volume LXVI, Issue 158, 6 July 1935, Page 19

PRICES AND COSTS.

POLICY OF GOVERNMENT. minister defends measures. (By Telegraph.—Press Association.) OAMARU, Friday. The' acting-Minister of Finance, the Hon. A. Hamilton, addressed the electons of Oamaru to-night. Before reviewing the legislative enactments of the Government, he spoke of the conditions in the Dominion prevailing prior to the formation of the Coalition Government, and th© phenomenal fall in prices which affected every section of the community. Out of these difficulties two pressing problems arose —one to restore export prices to a higher level, and the other to reduce internal costs to a lower level. Ho contended that the action taken by the Government was the soundest, and that the best possible results had been achieved. Mr. Hamilton said that, while the action of the Government in reducing] interest rates was considered by some to be somewhat severe, it had to be remembered that the preservation of the lenders' capital was of much more concern to him than the amount he might receive in interest. Steps were taken to reduce interest on State loan and local body debentures, mortgages and bank overdrafts, the total adjustments being approximately £4,000,000. Referring to the controversial subject of the raising of the rate of exchange— the proper term for which was depreciation of currency—the Minister said that, though there were some disadvantages in the higher rate, these were far outweighed by its universal justness, fairness and advantages. It was a much sounder method of raising the export price level than the system of guaranteed prices to farmers advocated by the Labour party. Mr. Hamilton spoke of the main functions of the Reserve. Bank, which took over the accumulated London credits, amounting to £20,000,000 sterling. Theasury bills amounting to 24 or 25 millions, owing by the Government-to the trading banks, were liquidated by the Reserve Bank, with a consequent enormous saving to the Government. To-day"' the Reserve Bank was a very valuable national asset.