THE EXCHANGE RATE

Press, Volume LXXV, Issue 22727, 3 June 1939, Page 9

THE EXCHANGE RATE

ro mu editor or the press Sir. —At a meeting of farmers held at Methven lately, some advocated raising the exchange rate to £ 150. Although I am not an economist I am told by a well-known economist that the farmer will get no material benefits. Among those present at the meeting wore local body men, including Mr Campion, of Methven, who is both a member of the County Council and also Ashburton Power Board, who advocated raising the exchange to £l5O, under which. I understand, you have to give £1 10s to get £1 of value. If I [ am wrong I am open to conviction i and will try to give a few examples of | what I mean. j Copper wire is quoted about £4O a ton, but under increased exchange would cost £BO. Where can the Power I Board get the additional £2O but by j putting up the cost to the consumer, I vet power boards talk of heavy expenses. Another example; A county 1 council requires a grader, say, costing I £SOO, which means under exchange £250. will cost £750. Where does Mr ’ Campion expect to get the additional ; £250 extra but by increasing the rates.

No wonder public bodies find their expenses high! The increased exchange rate means that the consumer, including the farmer, must pay for a higher cost of living because no businessman can give 30s worth of goods for 20s; because that is what exchange at £l5O means. Should a farmer or any other individual be inclined to pay a visit to England, which I am told requires at least £3OO, under the increased rate it would cost an additional £l5O, for which he gets nothing. Or should the farmer ship home, say, wool or any other commodity, his freights will go up an additional 5 per cent.; then he would squeal. Repayment of the Government loan, due in 1940, of £17.000,000, would cost an additional £8,500,000, or £25,500,000. which means the Government must tax the taxpayers at the rate of nearly £6 a head to pay the additional £8,500,000. And yet they talk of high taxation. They are only asking for it. I am not a Labour supporter, but I think that Mr Savage is the farmer’s friend when he refuses to raise the exchange, and notwithstanding all the opposition to the guaranteed price, it is the fairest to both the farmer and the other sections of the community, who have to be considered, although it may not be perfect. The dairy farmer during the last two years under guaranteed prices has got every penny that could be got out. In the result the Government is faced with a deficit of £1,000,000 which the farmer would never have got, but raflferty rule in marketing under the old system has been avoided. Some of those advocating the exchange will have to face an increase in shipping freights through increased exchange. I have tried in my humble way to point out that juggling the exchange will not help the farmer, and he should know by this time that no businessman can afford to give him £1 of goods for 10s, or bankruptcy would be the result. Any increase he may get by increased exchange means an increase in what he has to buy, which means he has no more money in the end than when he started.—-Yours, etc., READER. June 1, 1939.