EMPIRE CURRENCY

Evening Post, Volume CXIII, Issue 91, 18 April 1932, Page 7

EMPIRE CURRENCY

STABILISATION URGENT

PROFESSOR COPLAND'S

VIEW

(From "The Post's" Representative.)

SYDNEY. 13th ApriL

Important comments on the economic position of Australia and New Zealand were made by Professor D. B. Copland, Dean of the Faculty of Commerce at the University, Melbourne, on Ms return from New Zealand by the Monowai. He laid special emphasis on the Deed for establishing a new basis for Empire currency, and said that neither the Commonwealth nor the Dominion could afford to wait until the Ottawa Conference.

Professor Copland said that tho.dollar sterling exchange rate was one of the most vital economic influences for the British Empire to-day. It was mare important than Empire preference. Aus•tralia and New Zealand wonld get more benefit from the establishment of Empire currency on a new basis than. from. Empire preference. What he particularly -wished to point out ■ was that a steady rise in the sterling rate on the dollar would mean a steady fall in the price of exports from Australia and New Zealand, unless gold prices advanced—and there was little prospect of that happening. Australia and New Zealand .would be vitally interested in securing the stabilisation of sterling at a comparatively low rate. By the time the Ottawa Conference was held sterling might have risen too much because of favourable developments in 'England compared with America and France. It was imperative that action should be taken at once, and Australia was entitled to take such action because she had pursued a policy of exchange depreciation rather than .price deflation. New Zealand was resisting such a policy, but would no doubt welcome stabilisation of sterling at a low rate when her currency and Treasury authorities understood that a rise in the sterling exchange would be harmful to the economic interests of the Dominion.

Beferring to the work of the Committee of Economists, of which he was a member, in New Zealand, Professor Copland said that the committee thought that the Dominion was in, the same situation as- ©very primary producing country in the world —she had falling exports values, rising unemployment, serious conditions among farmers, and a growing Budget deficit; The committee had indicated that New Zealand should adopt a plan similar to; that adopted at the Australian Premiers' Conference in June last. That plan was now in progress of being adopted, but was hampered to some extent by an acute divergence of opinion between the different sections of the community as to the extent of the causes of the depression. The differences were mainly between economic interests, as, for example, the controversy between the cities and the country.

New Zealand had adopted a policy of exchange regulation. A pool had been formed to guarantee payments in London, but there was a difference between the New Zealand pool and the Australian pool, namely, that all exports had to be licensed and the proceeds passed through the banks, which regulated the rates of exchange. There was no open market and no reliable information as to what the natural rate of exchange should be. Consequently, the primary producer felt that his products were being commandeered at a low price in order to sustain other members of the community. There was an acute disparity between costs and prices in the export industries, which were the very backbone of the country. New Zealand farmers had been denied the benefits of the free exchange rate which had been of such help to Australia.