BANK POINT OF VIEW

Evening Post, Volume CXII, Issue 120, 17 November 1931, Page 9

BANK POINT OF VIEW

POSSIBLE REACTIONS

The general manager of the Bank of Now South Wales (Mr. A. .C. Davidson) has made a statement showing the effect which any lowering at present of the exchange rate, Australia on London,' would have on industry and employment in Australia.

Mr. Davidson's statement is as follows:—

"Since Great Britain suspended the gold standard there have been repeated suggestions that Australian' exchange should1 fall. Contemporaneously with the oponing of the expoTt season undof favourable conditions, and more particularly in the last few days, these suggestions have been renewed with tho vigour of active propaganda in favour of a -lower exchange Tate. "The reactions of such a fall on the recovery in' Australian prices now evident and on the consequent restoration of confidence_ would bo highly unfavourable. The 'fall in the rate .would reduco immediately the incomes of all exporters at a time whon the first fruits of recovery seemed at last to-be ripening. If severe, the drop,in the rate would impair .the competitive strength of Australian exporters in tho Far Eastetn markets .where, as a direct result of the exchange advantage, a big and promising export trade has been established. This trade has grown rapidly despite the .depression, and our economic policy should aim at making it a permanent addition to our oversea markets. With, the recovery in silver the Par East offers particularly bright prospects to tho successful, competitors there.