EXCHANGE RATE CHANGE

Press, Volume LXXXIV, Issue 25608, 24 September 1948, Page 8

EXCHANGE RATE CHANGE

EFFECT ON PRICES STATEMENT ISSUED BY TRADERS (P.A.) WELLINGTON, Sept. 23. A statement on the effect of the exchange rate decision on prices issued jointly by the New Zealand Manufacturers’ Federation and the Associated Chambers of Commerce of New Zealand states: “Considerable public misunderstanding has arisen over statements made in the House of Representatives recently specifying new prices likely to operate in respect of some foodstuffs, clothing, and other items in consequence of the exchange rate decision by the Government. “A number of these statements were not factual or they exaggerated . the reductions that will be brought about. A number of those statements have beeft publicly refuted by the sectional trade groups concerned, and it is hoped that further claims regarding specific reductions will not be made without full ascertainment of the facts from the trade groups which are affected and which are in a position to know. “There are a number of factors which operate to offset in many instances price reductions equivalent to the full 20 per cent, exchange rate reduction, such as, (a) continuing increases in the cost of goods and raw materials from overseas (publicity has already been given to the fact that the cost of certain lines bought under the new exchange rate were actually higher than the cost under the old); (b) locally manufactured gods, in which the labour content is a substantial or is a greater part than the raw material content, can consequently reflect a price reduction nowhere approaching 20 per cent.; (c) where Government taxes constitute part of the price of the commodities, “There is no doubt that with goods or raw materials bought at stable or falling overseas prices price reductions will follow, but we stress the importance of the ascertainment of facts by the authorities from responsible trade sections before official claims as to new prices are made in the House of Representatives or elsewhere.”