THE FINAL STEP

Evening Post, Volume CXV, Issue 16, 20 January 1933, Page 8

THE FINAL STEP

CABINET SITS LATE

CONFERENCE WITH BANKERS

It was not. until 1.15 o'clock this morning that the Prime' Minister made his announcement regarding the increase in the exchange rate and the resignation of Mr. Downie Stewart.

Earlier in the day the Prime Minister had indicated that it was not likely that any statement of the Government's policy would be made until there had been a caucus of the Coalition Party, but, as was suggested by "The Post" last night, reports of the resignation of Mr. Stewart apparently precipitated matters. Cabinet met at 8 o'clock last evening, and three representatives of the Associated Banks— Sir Henry Buekleton, Mr. J. T. Grose, and Mr. W. A. Kiely—and two Treasury officials —Mr. G. p. Eodda and Mr. B. C. Ashwin —were called into consultation, remaining in the vicinity of the Cabinet room until nearly 1 o'clock. After their departure Cabinet again met and approved of a statement setting out the Government's decision. This statement, together with an announcement of Mr. Stewart's resignation, was handed to Press representatives at 1.15 o'clock. , ■ - ■

Neither the statement on the exchange question or on Mr. Stewart's resignation came as a surprise, as it had been known for some days that Cabinet had made up its mind and that Mr. Stewart had given expression to his disapproval of the Government's policy by placing his resignation in the hands of the Prime Minister. , In arriving at a decision to raise the exchange rate to 25 per cent, the Government acted in accordance with the recommendations of a committee of economists consisting of Dr. Hight, Professor Belshaw, and ProfessorTocker, who, in an interim report on the economic position of the country, repeated their former recommendation that the rate should be fixed at 25 per cent. On the previous occasion the three economists named ihad the support of Professor D. B. Copland, of the Melbourne University. The Secretary of the Treasury (Mr. 'A. D. Park) was also a member of the original committee, but in an addendum to the report expressed his dissent from the opinion of the economists that there would be net gain to the Budget from an increase in the rate of exchange. He expressed his conviction that the immediate effect of an increase would be to increase considerably the- Budget difficulties. There is no reason to believe that either Mr. Park or other officials of the Treasury have changed their opinions since the report was presented.