Farmers and Exchange

Dominion, Volume 25, Issue 293, 6 September 1932, Page 11

Farmers and Exchange

sir,—ln your issue of the 2nd instant, Mr W. Sisson states that 1 persistently prjnfi to notice a oogey aneut Ute recent exchange controversy •but permit me to assure Mr. 6mson that the arguments put iorwurd ‘by me are no in trie nature of a bogey, but have been prompted, by an earnest desire to prevent the New Zealand-people .from beu‘» strangled by Uat octopus, uncontrolled intlauon, which is deliberate currency de^'OT i tbe I pur.pose of this reply to Mr. Sisson, it is assumed that he m thoroughly conversant with the mechanism ot the Foreign Exchanges, otherwise he would not cuter into the controversy. It is, however, extremely difficult to understand the statement that the farmers did not want any artificial exchange rate, and asked for fairness only, particularly u hen it is remembered that the protagonists of an artificial rate of exchange on London advocated a 40 per cent, rate in the so-called interests ot the farming ctmi muuity. Allow me to authontatii elyi state that certain interests and the primary producers d rate of exchange on London to.be peg ged” at a high level not only at the: ex pense of our credit m London and eiery section of the community, but at the ultimate expense of all primary producer. It is advisedly stated that the boomerang and cumulative effects of J IDCO H t^ ol t change inflation are too dreadful to contemplate, and must at all costs be guardCJ To a effectively demonstrate that the farmers received more than a tair price for the London funds resulting from .the realisation of their produce o«E«» d “ p £ ing the currency of the Order-in-Council regulating exports, it is necessary to examine the trend of our export and import values for that period. Immediately, prior to the introduction of the regulations the trade returns for the year ending December 31, 1931, lowing position:—lmports, exports, £35,153,028; excess of exports, IMhefigures for each of the following six months, during which the existed, are examined, it will be readily seen that any increase in the rate ol ex change would have been totally unwarranted, and if any section of the community suffered by the maintenance■ of the rate at 10 per cent., the importers did while the primary producers « ce > vc d a higher price for their products, in New Zealand currency, than they ]V re . Iv entitled to. The published statistics

6 months £11.165,823 £22,178,521 It will be evident that every month during the period in which the export regulations existed the value of exports was greater than the value of imports, the demand for London funds was less than the supply, and the usual tendency, in such circumstances, is for a downward movement in the exchange rate on London to take place. For the period reviewed it will be noticed that there was an excess of exports totalling which is more than sufficient to meet our external interest obligations. Mr Sisson is challenged to effectively prove his statement that the exchange rate on London was held down in favour of importers, and also to successfully demonstrate that the primary producers did not receive fair treatment.—l am. e,C " OBSERVER. Wellington, September 3.

1932. January . February . March .... April • • • )[av £ 2,172,752 1,804.492 1,872.039 1,760,689 1,688.974 £ 3.382,500 4,434,627 3,682,468 4.957,535 3.116,273 June ...• 1,866,877 2.605,112