The Dominion. WEDNESDAY, JANUARY 18, 1933. FARMERS AND EXCHANGE RATES

Dominion, Volume 26, Issue 97, 18 January 1933, Page 8

The Dominion. WEDNESDAY, JANUARY 18, 1933. FARMERS AND EXCHANGE RATES

tor “te. Nei'her mcetmg of commercial men be found unanimously C S * h rate s i lou id division as we have advocated all alon & , tl a rot be pS X high or low but fixed over a penod at the natural rate determined by supply and demand. ,• the wording Apart from the farmers’ choice m exchange policy, the woidig of the P resolution was unfortunate.. The idea o e even with Australian and Argentine competitoi . - ricin se Australia for instance, accept the challenge and proceed to debase W Ser?’ A mee to gain advantage by exchanges is bv no means inconceivable. When Great Kiitain sus nended°the gold standard, Denmark was quick to follow lest she be prejudiced and, after a long struggle South Africa has done same From another point of view, that of the British farmer, it v regrettable that the meeting should have c°up led the idea efeompet'tio with exchange. New Zealand too often overlooks the fact that her most considerable competitor is not Argentina, Australia or b but the British farmer. In concentrating on catching up on Austialia and Argentina, New Zealand forgets that she is stealing a manchi on the British farmer. The latter is already complaining about Dominion competition. If the New Zealand producer through deliberate exchange manipulation gains a 25 per cent, advantage, there may be reactions Any protest by British farmers might well be joined by British manufacturers who would not relish the extra impost on their expor s to the Dominion. Under this head, however, the farmers have atoned by their resolution favouring an “immediate substantial reduction of tariffs, especially on British goods. Another point about the resolution is that the Government may wonder how far the farmers want to go in raising the exchange. Australia’s rate is 25 per oj’j Argentina’s only about 11 per cent., the peso being quoted at 3/6$ against about 3/111 at par. From the discussion, however, it seems clear that farmers have their eyes on the Australian rate. . Claims were made at the meeting, and had pieviously been made, that Britain herself has helped her exporters by depreciating her currency or, in other words, raising exchange rates. Ihe fact is Great Brita'in did not go off gold voluntarily, but of necessity. She was forced off. New Zealand farmers propose currency depreciation deliberately and of choice, a very different procedure. It was also stated that Britain was using her Exchange Equalisation Account to maintain a high exchange policy. z If there is any evidence of this, there is as much to show that the account has been used to. suppot t sterling. Actually the fund has been employed as a stabiliser to prevent the too rapid fluctuation of sterling quotations and so minimise the disturbance to trade.

The resolutions on exchange and other questionsXntcrest rates, tariffs, derating, taxation and State retrenchment —will no doubt have the, careful consideration of the Government, at present engaged in hammering out a programme. Cabinet should be assisted by the definition- of the farmers’ position but has also to remember that it represents all the people and not any particular class, however important in our national economy.