DIVERSE OPINIONS

Evening Post, Volume CXV, Issue 24, 30 January 1933, Page 10

DIVERSE OPINIONS

PALMERSTON DISCUSSION

THE FARMERS' QUANDARY

(By Telegraph.) (Special to "The Evening Post.") PALMERSTON N., This Day. Mixed opinions about the' higher rate of exchange wore voiced at a meeting of Palmerston North business men, called by the Chamber of Commerce. The president (Mr. M. H. Oram) strongly advocated a high exchange as part of a comprehensive plan for meeting the Dominion's difficulties. He contended that the effect was to increase immediately the amount of money in circulation in the Dominion. The country was suffering from a discrepancy between the prices received for primary products and the costs of production. Relief could be obtained in various ways—firstly, by an increase in the prices of primary products; but unfortunately there was no immediate prospect of that. The position could also be adjusted by'a manipulation of the currency, or could bo adjusted I temporarily by an increase in the exchange rate. Another alternative was not to interfere with natural economic laws, but if that were done it would cause widespread suffering and loss.' However, it would' have this advantage —everybody would know, where he or she stood and would-be able to plan accordingly. He did not think it mattered which plan was adopted, as long as a definite plan was adopted and stuck to. , IMPORTERS PENALISED. A protest was voiced by Mr.'W. H. Brown at the arbitrary interference by the Government "overnight at midnight" with the exchange rate. Goods for Christmas trade had been imported in October on ninety days' terms, he said, and they had been costed and sold on the assumption that exchange would not be altered. Now importers were called upon to face an additional 15 -per cent, in their costs, for which they had made- no provision and had no redress. Furthermore, the vaguereferences of the Government to a possible • sales-tax--were-most unfair in their indeterminate nature. "The -action of -the -Government," said Mr. F. J. Nathan, "or the Prime Minister, I should say, in doing what has been done, and the way it has been done, can orily destroy confidence, and if you destroy confidence, you destroy credit. (Hear, hear!) The Prime Minister, .had. said that the matter of exchange was one for .the bankers, and how he has acted against this view. I Won't say I am. against a rise in the exchange, but I am against the way in which it was done." Mr. Nathan said that' the increased exchange in Australia had been of benefit,, to the traders and the people. What .he definitely disagreed with in regard to the increase in New Zealand was the way it was done. Had :the Government gradually increased the exchange,'starting from 18 months ago— Mr. J. Hodgens: And not TeducCd wages.. Mr. Nathan: Surely. AID TO DAIRY FARMERS. Had that course been followed, Mr. Nathan proceeded, there would have been no" indignation meetings. Goods would be increased in cost as a result of the present action, but not to tho extent that might be believed. Mr. Oram had- said that this would not benefit the small farmer, because his butter and cheese had been sold. The speaker wanted to correct that; 95 per cent, of the butter was sold in London on consignment, and not f.ti.b. iv this country. The people who were going .to directly benefit were the large mercantile houses engaged in making advances to the farmers, and if as a result of the increased exchange the farmer could reduce his indebtedness to these houses, it would be of benefit to the Dominion. What was the position of the farmer? Mr. Nathan asked. It cost him 8d or 9d to produce a pound of wool, and he was getting 4d. Definitely he could not go on. If he could pay off his indebtedness, it would benefit him. The question of exchange was a matter for experts, not for armchair critics. Neither Mr. Coates nor the Prime Minister was an expert in finance, and the present step should never _have been taken when their financial advisers and the, Minister of Finance said it was wrong. Mr; H. B. Free asked Mr. Nathan whether, in view of the fact that the Dominion had already the benefit of a 10 per cent, pegged exchange, which some of the banks said was not justified, he would suggest that the Dominion should add another 15 per cent. What our nearest neighbours were doing had to be considered, replied Mr. Nathan. The dairy farmer said he could not produce at 7d a pound,- and needed at least Is, said Mr. Hodgens. So how coufd Id to l.d a lb extra meet the position? Butter could be produced at less than Is a lb, replied Mr. Nathan, depending always on the amount paid for the land. The Dominion had to get down to a proper costing of land before it could arrive at a basis of production. It was decided tcr Call another public meeting, at which the question could be discussed more fully.