A SENSE OF PROPORTION

Dominion, Volume 26, Issue 105, 27 January 1933, Page 8

A SENSE OF PROPORTION

Business men have a plain grievance against the Government because of its sudden and complete change of front on the exchange question And they are entitled to express it. So important an issue cannot be allowed to go by default and those who dissent have a right to make themselves heard. At the same ’time the antiinflationists should not, in venting their justifiable indignation, lose a due sense of proportion. Uninformed people may conclude from the high tone of some of the discussion that the bottom is going to drop out of the country because the exchange on London has been raised 15 per cent. Thev should not forget that there are probably as many pros as antis, and that there are many who are sincere and genuine, and who claim to be just as logical, in arguing that a higher exchange will do far more good than harm. They should also remember that the alternative to higher exchange might prove to be more wage cuts, more failures, and fairly general liquidation. Another fact that should not bt overlooked is that every considerable country in the world to-day, with the exceptions of France and the United States, is working on a higher exchange. GreatBritain’s exchange rate is about 30 per cent, above par and it is generally admitted that her trade has benefited by the depreciation of hey currency. As an international trader she advanced last year from third to first place. The difference between her case and ours is that she was forced into a higher exchange while wc are adopting it deliberately. The valuation of her pound is natural; that of ours, artificial. But it is notable that Britain, once off par, is not at all anxious to return to that frigid eminence. . How far the fact that New Zealand has deliberate! v chosen to inflate het exchange is going to affect the argument remains to be seen. It is certainly a debit.item in several accounts. But no one can yet say certainly what the ultimate effect will be. Deliberate manipulation was used 15 months ago by Denmark, Norway and Sweden, and by other countries later, but it does not seem that the experiment has ended in disaster.

At any rate it will do no good, and indeed it is positively damaging to make the case out worse than it is. It seldom happens that all’ b 7,4 ls , on one . s ’d e and all the wrong on the other. Perspective should not be lost in acrimony. Business men may fairly resent the apparent fact that a march has been stolen on them, but their argument is telling enough without immoderation.