FOREIGN EXCHANGES

Dominion, Volume 30, Issue 265, 5 August 1937, Page 14

FOREIGN EXCHANGES

Excess Costs of Protection PROFESSOR COPLAND’S VIEW Professor Copland, Dean of the Faculty of Commerce at Melbourne University in a lecture before the Institute of Political (Science last week, said that there was urgent need to apply the same critical review of the excess costs of protecting primary industry as was now applied to protected secondary industries through the Tariff Board. He added that Australia s most costly protected industries were some of the primary industries, notably sugar and butter.'National policy should aim at limiting the excess costs to their present amount and reducing them as world prices of the commodities affected rose. Professor Copland said that while it might be difficult and costly for Australia to retrace her step and eliminate some of the more uneconomic forms of production built up under the home-price system, it should be neither difficult nor costly to prevent uneconomic extensions of the home-price system. “Obviously,” said Professor Copland, “a tax on food is regressive; it falls with greater relative severity on the poor than the rich. Similarly, the incidence of the home-price for a common foodstuff is regressive. But the fact that the producer has his own organisation to collect the excess proceeds of the home price appears to make all the difference. The consumer, if he knew that he was paying so many pence a pound on butter or sugar, would probably revolt. By levying direct taxes on income or wealth, or by imposing indirect taxes on other commodities less widely consumed, the Government could make the tax less regressive and reduce the proportion of the cost that enters directly or indirectly into industrial costs. “Moreover, the mere fact that the Government was raising the ‘bounty fund’ through taxation would direct attention tp the desirability of keeping the total cost within reasonable limits. Cost of Expanding Production. “Every expansion of production for export merely serves to increase the burden on domestic consumers if the new producers are to receive the same bounty as the old. Under the Australian system no attention is given to this problem, except in the case of sugar in Queensland, where efforts are being made to limit the expansion of production. On the contrary, every increase in primary production is welcomed by both State and Federal Governments, whether the commodities produced are imposing additional burdens on consumers or not. - “The predominant form in which the bounties are now paid is through the device of the home price operated with the tacit or open approval of Governments by the producers acting in their own interests. This is the application to agriculture of the cartel familiar in heavy industries.” Professor Copland pointed out that the unsheltered exporting industries bore about one-third of the excess costs arising from the device of the home price, anil most of it fell upon primary producing industries themselves. To this extent the home price was a device for robbing Peter to pay Paul. It depressed land values in. unsheltered export production, while raising land values in protected primary production.

Position of Sterling m . , London, August 3. The tollowing mean closing rates on foreign exchanges were current to-day compared with those ruling on July 31:—

• Unofficial, t Official. London, August 3. Gold.—£6/19/74 an ounce, fine. Silver.—Spot, 20d. an ounce; forward, 20 l-16d. On New Zealand Currency Basis The Bank o t New South Wales, Wellington, quoted the following rates for their purchases and sales of foreign exchange yesterday:—

The Associated Banks (other than the Bank of New South Wales) quoted the following dollar rates yesterday on a New Zealand currency basis. They are subject to alteration without notice. U.S.A. Doi. Canadian Doi. Selling: (Per £1 N.Z.) (Per £1 N.Z.) T.T. 3.00 7-1 (5 3.908 O.D. 3.90} 3.9913-16 Buying: O.D. 4.(M 1-16 4.0-1} N.Z. Pound Abroad Based on figures quoted by the Bank of New South Wales, the New Zealand pound, compared with its original par value, is equivalent to approximately:— 16/1 in London. £l/0/1 in Australia. 16/5 in U.S.A. 16/5} in Canada. 17/0} in France. 16/5 in Italy. 9/8 in Germany. 11/10} in Java. (31/8/14 in Japan.

Par. July 31. N. York, dol. to £ 4.866 4.97 13-16 4.98 3-16 Montreal, dol. to 4? 4.868 4.9715-10 4.984 Paris, fr. to £ 124.21 : 132 51-64 132 51-64 Brussels, be], to £ 48.611 29.59 29.005 Geneva, fr. to £ ) 21.08} 21.685 Amst’dam, fl. to £ 12.107 9.021 9.03} Berlin, inks, to 24.43 12.37 12.38 St.’holm, knr. to X? 18.159 19.395 19.395 Clingen, knr. to £ 18.159 22.40 22.40 Oslo, knr. to £ 18.159 19.90 19.90 Vienna, scligs. to £ 34.585 26.50 26.50 Prague, knr. to £ 134.25 : 142.75 142.75 Hel’fors, inks, to £ 193.23 226.125 226.125 Madrid, pes. to £ 25.225 Lisbon, esc. to 4? 100 110 3-16 110 3-16 Milan, lire to X-* . 92 94 9-10 9411-16 Athens, drac. to £ 375 •547J •547} Bucharest, lei to £ 813.60 •670 •670 Belgrade, din. to £ 270.31 216 210 Itio de J., p. to mil. 4.899 14} t«i B. Aires, p. to pesa 47.02 — M. Video, p. to peso 51 t39J 39} Calcutta, p. to rup. 18 18} 18} Shanghai, p. to dol. 18 14.25 14.25 H.-Kong, p. to dol. — 14 25-32 14 29-32 Y’hania, p. to yen. 24.582 13 31-32 13-31-32 Batavia, fl. to £ 12.107 8.90 9.01

New Zealand Buying. Selling. on London . T.T 124 124/10/£N.Z. to £stg. 100 O.D. 123/10/- • 124/8/9 Australia T.T. £A to £ N.Z. 100 O.D 101 100/10/Fiji . T.T 90/7/0 89 £F to £N.Z. 100 O.D. New York ■ T.T. 4.0308 3.9938 Doi. to £N.Z. . O.D. 4.0408 3.9978 Montreal T.T. 4.0310 3.0961 Doi. to £N.Z.‘ . O.D. 4.0435 4.0001 Austria T.T. — 20.88 Sehgs. to £N.Z. O.D. 20.89 Belgium T.T. — 23.643 Fns. to £N.Z. .. O.D. 23.654 Czechoslovakia ... T.T. — 113.87 Crs. to £N.Z. . O.D. —— 113.92 T.T. 18.203 17.893 Knr. to £N.Z. . O.D. 18.203 17.899 France T.T. —. 105.89 Bel. to £N.Z. . O.D. — 23.654 Germany T.T. — 9.874 Mks. to £N.Z. . O.D. —— 9.879 T.T. ——_ 7.209 FIs. to £N.Z. . O.D. — 7.213 Italy T.T. —— 75.89 Lire to £N.Z. . O.D. — 75.94 Java T.T. 7.182 FIs. to £N.Z. . O.D. 7.186 Norway T.T. 16.182 15.892 Knr. to £N.Z. . O.D. 16.242 15.898 Sweden T.T. 15.786 15.491 Knr. to £N.Z. . O.D. 15.846 15.497 Switzerland T.T. O.D. —— 17.333 Fra. to £N.Z. .. —-—• 17.338 Noumea T.T. — 105.14 Frs. to £N.Z. . O.D. — 105.19 Papeete T.T. — 105.09 Frs. to £N.Z. .. O.D. — 105.13 Hong-Kong .... T.T. 18 7-32 18 21-32 N.Z. d. to Doi. . O.D. 18 3-16 1821-32 India and Ceylon . ' T.T. 22? 22 21-32 N.Z. d. to Kup. O.D. 2211-32 22 21-32 Japan T.T. — 17 15-32 N.Z. d. to Yen . O.D. — 1715-32 Shanghai T.T. 17 20-64 17 57-64 N.Z. d. to Doi. . O.D. 1727-64 17 57-64 Singapore T.T. 34 23-32 35 13-64 N.Z. d. to Doi. . O.D. 34? 35 13-64 Chefoo T.T. 17 7-16 18 1-16 N.Z. d. to Doi. . O D. 17 25-64 18 3-64 Manila T.T. 29 27-32 30 11-32 N.Z. d. to Peso . O.D. 29} 3011-32