EXCHANGE PROBLEM

Evening Post, Volume CXIII, Issue 32, 8 February 1932, Page 10

EXCHANGE PROBLEM

FARMERS' REQUEST

MINISTER INTERVIEWED

FUETHER DISCUSSIONS

(By Telegraph.)

(Special to "The Evening Post.")

PALMERSTON N., This Day.

In furtherance of their advocacy of a free exchange a very large deputation of farmers waitod on tho Hon. E. A. Ransom (Minister of Agriculture) in Woodville, the _pentre of his own electorate, on Saturday afternoon.

In putting the arguments in favour of the free exchange, Mr. Page (Woodyille) traversed familiar ground, and added: "If the farmer were to receive the full benefit of tho exchange rate, it would amount to £2 for each cow in his herd and would put him in a position where he could purchase fertilisers and moro or less pay his way. People might say that further taxation would have to be levied; to that I would reply: Let the taxation be confined to the .proper channels, and allow everyone to bear his fair share of tho country' 3 burdens."

When the Civil servants had to get a 10 per cent, cut, Mr. Page went on, there had been all-night sittings of Parliament, with members fighting tooth and nail; but when the farmers were getting a 20 per cent, cut there was not even a suggestion of calling Parliament together to consider the matter. Had the question of the exchange been before the House, farmers would never have been penalised. He had noticed in that morning's paper that Sir Harold Beauchamp had said that banking and the rate of exchange should be left to bankers, and not bo dictated by economists and farmers who had no knowledge of the practical effect. "Well, if the dairy farmer has no knowlcgo of the practical effect of being robbed of £2 per cow, who the dickens has?" said Mr. Page. (Laughter and applause.) PREPARED TO TAKE THE RISK. "We want a free and open rate of exchange," said Mr. A. H. Hansen (Dannevirke). "We aro not asking for any subsidy or premium; what we seek is the benefit of the rate of exchange, which must follow in our favour if left free. If ever there has been a time iv the history of the dairying industry of the Dominion when it has been so vital to the interests of the farmers that they should be given every facility to get the last penny for their labours, that time is now. We are prepared to take the risk of the exchange, and if it docs not go up to tho rate expected there will be no kick coming from, our side. All wo ask for is justice; it is nothing unreasonable. We maintain that the action of the Government in regard to the rate of exchange is the means of penalising one section of the community to no very great possible advantage to the other side. If the farmers arc still to be penalised, it is a very poor look-out for the welfare of the country as a whole." MORE THAN ONE ANGLE. In reply, Mr. Ransom said the question of exchange rates should not be looked at from one angle alone. However, farmers were entitled to view it from the angle that affected them, and anything that affected them affected tho ■whole of the community. He had inquired whether the rate of exchange in Australia was governed by the banks, and had been told that that was not entirely so; outside brokers controlled the exchange just as much as the banks. While; it was correct that the rate did rise to 30 per cent, in Australia, it was not correct to say that the rate would rise similarly in New Zealand if it were not pegged. The Government had not pegged tho exchange rate; tho matter was controlled by tho Associated Banks, although tho action of the Government had had some bearing on it. ANOTHER CONFERENCE TO BE HELD. Farmers realised that they had to accept world prices for their produce, and they were entitled to sell London credits on tho most favourable market. If they were denied that right, then there was justification for inquiry as to whether the causes were right or not. The exchange problem was giving the Government very serious concern, and was still uncler consideration. Another conference would be held in Wellington between bankers, commercial interests, and the Government to ascertain just what could be done. A voice: "Why don't they have the farmers there?" Mr. Ransom: "I am not sure whether they are not represented. Some people complain that there are too many farers in the present Government, so you are not suffering because your interests are not being considered.'' • For many years, Mr. Ransom proceeded, it had been tho practice of tho Government to borrow on the London market for public expenditure. The money had never loft London, but had been used there for London commitments, and money raised in ,New Zealand by taxat'im had been used for public, works. Until this year exchange had never been a burning question. THE BANKS' STIPULATION. *Tow Vao Government had been informed by the Bank of E^Vnd ti*i .!t would not be nhk to borrow *•♦ ?**;; London market, and that it would be expected to repay at an early date £4,000,000 raised .by short-dated Treasury bills, With another £8,000,000 to meet interest commitments. Only one course had been open to the Government—to ascertain whether the banks in the Dominion could find £.12,000,000 in London during the present year. The banks had replied that they 'would be able to do so, but had stipulated that the exchanges on London should be pooled and the banks have the benefit. Every 10 per cent, in exchange paid by the Government on the £12,000,000 it had to find in London this year meant £1,250,000, and if the rate went to 30 per cent, a total of £3,750,000 would have to be found by the people of the country. Undoubtedly a higher rate of exchange would do what the various speakers that day had said—assist the farmers—but the Government had to consider whether the disadvantages did not outweigh the advantages. The country had been told that if the rate went up it would reduce imports to the Dominion, but it had to bo remembered that there had already been a big drop. He could not commit himself any further in the matter other than to say that as the district's representative and as a farmer his interests were- wrapped up in those of the farming community. The interests of the farmer would not be lost sight of by the Government. FORCED LOAN NOT ADVISABLE. Asked whether it would not have. been feasible for the Government to obtain the £12,000,000 it wanted by bringing in war-time legislation and forcing people^ to lend to the State, Mr. Ransom said that the money would (till havo to transmitted to London. Jt would not be in the farmers' intcr#tts for the Government to obtain such $ sum by forced loans and thereby limit thef amp.unfc of money available at potent • ifor^fcans to farmers.