CAN THE EXCHANGE REMAIN?

Evening Post, Volume CXV, Issue 123, 27 May 1933, Page 12

CAN THE EXCHANGE REMAIN?

(to the Editor.) .Sir,—Mr. Coated -'emphatically denies rumours regarding the .livelihood of a reduction in the exchange.-. This is. certainly very helpful io .business men, especially those '* who are' Representing British firms, and it would -be,'.still mora helpful if he had given a guarantee that the exchange would not be |■interfered with for a year or two. But as a representative of British-and foreign manufacturers I cannot see how it is.; possible for tlie exchange to remain, that is, if we want to hold our export trade with, Britain. ■ It costs' on an average about ,<0 per cent, to land British goods, and on top of this. 5 per, cent, sales tax, which works out at about 8 pet' cent, on- the ', original cost. This makes British goods, which are of a higher grade than foreign manufactured goods, almost prohibitive. England pays higher wages than any country-in Europe and Asia, therefore she is unable to compete • against cheap foreign labour, and with' the spendiug power of the public today so greatly. reduced' they are -forced to buy very low grade goods, and this gives the advantage to the foreign manufacturer. This it* why the impprtn from Great Britain arc so rapidly declining. , With the high rate of exchange it ia-imposnible for,the public to buy'the better article'that Britain produces. ■' The country has gone to, the expense of a Tariff, Commission, but one faila 'to ne'e how this can give any-further preference to Eugland when the Customs Department for year* ha* cut the duties down to a minimum, At the time time giving a fair protection to our secondary industries in New Zealand., It costs over 40 per Itent. to land goods from Britain that are "free of duty," so how is the Tariff Commission to get. over this? Regarding the duties between New Zealand and Australia which were adjusted recently and were brought to the earn? terms as the duties between New Zealand and Britain, this will not give Britain any benefit. .In the first case tho difference was bo small, and secondly Australia has the. advantage of 30 per cent, because the exchange between .New Zealand and Australia is nt par, whilst 'England is penalised to tho, extent ■o£ 25 per cent, exchange. Also there ' lias been an arrangement made recently between Canada and New

Zealand. It was pointed out that this was a. very favourable arrangement because for the-last six,'months'the trade between the two countries has almost been equal. The reason for this is that since Kngland went off the gold standard the value of the £ in^Canada, was only worth 14s to 15s, So this made it impossible for New Zealand to buy Canadianmade goods, but now the £ is worth about 18s or 19s naturally the export trade from Canada to New Zealand will increase considerably. - : I predict for 1933 the following:—That Australia will increase he? exports ;co New Zealand by, about £I,ooo,ooo,.Canada by about half a million, and Japan in tho region of £2,000,000, also there will be an increase in the secondary industries in New Zealand, as several firms have started recently. ..to manufacture goods that England lias been Supplying us'with; having this extra protection of the exchange ,they' are able to compete. Taking all this into consideration, I, estimate that our import's from. England will bo down; somewhere .in . the, region of £8,000,000, aiid Mr. .Coates predicts thnt our. exports from. Uew Zealand for 1033 will he higher than 1032, which wer'a £32,000,000. . .' ■■ . . When , those figures come before tho Board of-' Trade in Britain with sugh an unfavourable balance of trading, one fears the result, especially when England has- been driving .very hard bargains with Argentina and Denmark,. etc., and if. she turns.round to us and states, as was recently mentioned in the- Houses of Parliament, why should they buy so much of our produce when we import so little from them. •'. ' , Unless there is an improvement-in our imports there is nothing surer than that, ourrquota for butter, etc., will be reduced. If this'happens it will be a sorry day for both farmers and businesses of New Zea--land.—l am, etc., CYJigo. .