EXCHANGE BATE.

Press, Volume LXVIII, Issue 20470, 13 February 1932, Page 14

EXCHANGE BATE.

POSITION OF DUNEDIN CITY.

BORROWED MAINLY ON LOCAL MARKET. LTHE PEESS Special Serricc.J DUNEDIN, February 12. That Dunedin at least is not to be numbered among those large cities mentioned by the Mayor of Wellington (Mr T. C. A. Hislop) in his remarks on the exchange rate as it affects borrowers on tho London market is proved by a statement made to a reporter this evening by the Town Clerk (Mr G. A. Lewin). Mr Hislop quoted the case of the Municipality of Wellington, whicU this year lias to send to London by way of sinking fund and interest about £500,000, the cost of which at an exchange rate of 125 would be & 120,000. Mr Lewin pointed out that the Dunedin City Corporation is not seriously concerned with the London financial position, as the great bulk of the cit3 r 's borrowing ha 3 been done on the local market to a much greater extent than has been the case with any other of the chief cities of the Dominion. The Corporation will for the 12 months ending March, 1933, remit to London the sum of £32,500 on account of London borrowings. With the exception of a loan of £IOO,OOO on-behalf of the Electric Power and Lighting Department, which was raised in London last year, tho city has indulged in no London borrowing for very many years. Interest Bill. As proof of this it might be mentioned that the total interest bill of the. City Council and Dunedin Drainage Board combined is round about £220,000 per year, of which only some £32,500 is payable in London. The position is that at the ruling rate of exchange in London to-day the cost of remitting this money means a charge to the City Council and Drainage Board of £3250, which sum would, of course, be proportionately increased by any rise in the rate of exchange. Mr Lewin stated that lie thought there should be no artificial control of the exchange rate. He was of the opinion chat it should be allowed to take its own legitimate course, apart from any artificial interference in the direction either of increasing or decreasing the rate. Harbour Board's Position. The position of the Otago Harbour Board, in so .far as its indebtedness to London is concerned, is very similar to that of the City Council, the annual remittance to London on account of interest being about £30,000. In this year's estimate the budgeting on this account has been figured on a 10 per cent, exchange rate, with the result that should the rate rise to 130, as has been predicted in some quarters, the Board will be compelled to find another £6OOO. MR MACHIN'S OPINION. RETURN FROM CONFERENCE. "1 think the exchange question is going the right way," said the president of the Associated Chambers of Commerce (Mr William Machin) on his return yesterday from the conference on exchange among the Government, the banks, the primary producers, and the Associated Chambers, which was held in Wellington on Thursday. "That is to say," he explained, "I think the solution will be in tho direction that the Associated Chambers is pressing for—a free exchange."