PARLIAMENT

Evening Post, Volume CVIII, Issue 62, 10 September 1924, Page 6

PARLIAMENT

TO-DAY'S PROCEEDINGS

HOUSE OF REPRESENTATIVES

The House of Representatives met at 2.30 p.m. : .

EXCHANGE QUESTION. , Mr. .W. D. Lysnar (Gisborne) asked tiie Prime Minister, seeing that" the- official report of the Imperial Economic Conference held in 1923 discloses tho fact that it was admitted on all sides, including the Committee set up by the Conference, that a return to the gold standard would be a solution to the exchange difficulty, and the Committee also recommended that the exchange difficulties could be' ameliorated if the note-issuing authorities were to accumulate sterling assets, and te undertake to exchange their local currencies for sterling assets, and vice-versa- and, as the exchange difficulties-have" obviously become more aggravated since the-date of the Conference, can the Prime Minister lntorm the House whether anythinV is being. done, or any proposal being put forward, which is likely to lighten the unfortunate difficulty with regard to the question of exchanges? The Prime Minister replied:— _ "The exchange position, instead of improving, is becoming increasingly difhcult. The disparity is too <>reat. Producers and exporters are at a disadvantage. '"It has been suggested that the difficulty might be overcome by means of imperial Short-dated Currency Bills conjointly guaranteed by Great Britain and the Dominions: Such a scheme was very fully investigated by the experts in attendance,at the Imperial Economic Conference, also by the financial a Risers to the-British .Government. Tn»se experts, however, considered that the financial and constitutional difficulties to be overcome were top great especially in regard to what is known as the "Purchasing Power Parity," in the respective countries and the control of credit and currencies administered by each country independently. "..'••. "The Committee considered that it was possibleAo achieve the same, or at least similar results, by Utilising and extending the existing'--machinery of banking and credit without having resort to the creation of a new instrument of Imperial credit with the various constitutional and financial difficulties.. to which that might give rise.

"This investigation led to the consideration of another method of'overcoming the obstacles of a balanced exchange with restricted -gold movement. Their recommendation, which was endorsed by the Imperial Economic Conference, was that the. best means of affording relief is through the op Nations of a central bank, with ample power to effect and control exchange operations as between its own country and the. country or countries with which it principally trades.,' Under this scheme, provision for1 the closest cooperation of .the Central Bank and noteissuing authorities would require to. be made. I have been in constant communication with bankersV and other financial experts regarding the best .solution of' a world-wide problem,' and this week a conference with the principal, bankers has been arranged with the object of considering the 'application' of the recom - mendations of the Imperial Economic •Conference to the exchanse system of New Zealand.". ■ : " .

"The resolution agreed to. by the committee at their meeting on 6th November,; 1923, was as follows t—'i'he' committee, having considered1 their terms of reference,'.having, unanimously resolv?d: —That where difficulties 'have arisen in regard to' exchange" between certain parts of the Empire and between such parts and the United Kingdom—(a) the position could be ameliorated if the note-issuing authorities were to accumulate sterling assets and to undertake to exchange their local currencies for sterling and vice versa; (b) this measure might be further developed and assisted by the creation of central banks and by mutual co-operation as recommended by tho Genoa Conference; (c) in some cases the bank charges for buying and selling sterling .appear to be unduly high,-and should be capable of reduction." The Hon. J. A. Hanan (Invercargill): "Are they suggesting that the note issue should be increased?"'

Massey: "There is no such suggestion hero, but it. follows naturally as ;a matter of course."'. ./ :*'■..'

.Mr. Hanan: "It means an expansion of credit." . ..'■ .

The Prime Minister: "Yes." He added that he had arranged for representatives of, the different banks of Welling- ; ton to meet him on Saturday morning. He hoped some good would result, beicause it was necessary to. get rid of the difficulties of the present position, or to have them ameliorated." '' : ; ■"'":■ A LOAN BILL. ■-';.-" Mr. Hanan asked the Prime Minister 'if the Government intended to introduce a Loan Bill this session, and for what amount. ■•' ■' j' .

Mr. Massey replied that there would be a- loan, and the amount would be 'in accordance with' the requirements of the country. He expected that a loan would | be floated in.London next April or May.' Mr. Hanan: "Can't you say the amount?'1 . .■._-.'.

Mr. Massey: "No, I can't." : The Gaming Amendment Bill w-as introduced. . i ■-.-■■■

(Proceeding.)