THE EXCHANGE RATE.

Press, Volume LXIX, Issue 20829, 12 April 1933, Page 17

THE EXCHANGE RATE.

TO THE EDITOB OP THE TRESS. Sir,—The infliction of an artificial rate of 25 per cent, for the exchange of money as between our principal customer, Britain, and ourselves, for the ostensible purpose, as explained by the Minister for Finance, of obtaining at the other end in London a larger sum of money than we put in at this end, has at least served this useful purpose of creating niucn thought. It is most evident that in the practice of this excellent piece of jugglery that it is up to the most astute to make use of this provision made for the ostensible purpose, and, we presume, hope of obtaining something for nothing. Under this illusion which is fast disappearing, the farmer has been induced to compel the Government to this, the most mischievous measure ever put on the Dominion's records. This huge impediment in trade will enrich the stock and station agency business, the mortgagee, the banks, and financial class generally. These will be able to collect practically all of this artificial money raised ostensibly for the benefit of the primary producer of New Zealand, but which has most unfortunately already proved to be a most devastating measure affecting the whole trade of New Zealand, and also cutting us off from all present attempts to stimulate trade in the world. Though we have already sanctioned through Parliament an expenditure of £1,000,000 as a premium to the banks for carrying this mischievous impediment to trade, it is known that the sum required may be double or treble the sum above named. Naturally our own City Council would be expected to give an example of astuteness in overcoming the difficulties and expense which this arbitrary rate of exchange has presented. Since we cannot now pay our debts in Britain without submitting to an exorbitant charge, it is evident that, as the council's advisers submit, an advantage could be gained by obtaining a loan in England with which to pay off an earlier loan raised there. This is indeed excellent, but why not arrange in a similar way for the payment of all interest? Or, indeed, why not hope that as our Government has tasted the blood of the investor some attractive device, possibly not novel, may be tried to obviate any future payments of either interest or capital. These suggestions from the Christchurch City Council are most valuable as stimulating thought as to the eventualities and possibilities presented by this imposition of a 25 per cent, artificial exchange. Evasions and manipulations are to be expected from a people with a natural gift for commerce and a born instinct to evade injustice. But when all is said and done, may it not be possible and simpler, as indeed I submit it is, at once to set about the abolition of this 25 per cent, exchange itself when our natural ability for trade may again be given a fair opportunity of obtaining a share of the world's business, to which we can only be entitled when we play fair.—Yours, etc., H S April 7, 1938.