NO ARGUMENT

Evening Post, Volume CXVI, Issue 85, 7 October 1933, Page 8

NO ARGUMENT

The Prime Minister would have been better advised yesterday had he not attempted to defend high exchange. The weakness and inconsistency of his arguments served only to emphasise the deplorable imperviousness to reason in which the Government has wrapped itself. High exchange was the product of political and sectional pressure in the first place. It is maintained now by the same means, and the Government's only answer to its critics is, in effect, that it has a whip majority. As we-pointed out on Thursday this answer can be given only until the day of reckoning comes. Then there must be a return to reason, and it may be made too late. Certainly there was little reasoning in the Prime Minister's defence yesterday. Even when he denied that the high exchange was class legislation his denial was supported by one of the strongest arguments against the policy. "It is applied to (the whole of an industry in which there are rich men and poor men." Exactly—and the consumer, the importer, and. the taxpayer must pay the rich man's subsidy as well as give the poor man relief. Indeed the richer /the exporter and the higher price his goods command the more "relief" does he obtain. But the general application to rich and poor does not make it less of class legislation. It was designed for the farming class and its continuance is an undoubted breach of the Government's pledge to consider the welfare, not of class, but of the nation.

It is difficult to discover anything in Mr. Forbcs's speech which calls for a reply. He did not reveal how this policy was affecting the Government's finances, how long the Treasury bills could be absorbed by the banks, or how the surplus credits would ultimately be disposed of; nor did he give any indication of having investigated the position. There was just a bald declaration of adherence to the higli exchange policy—it may be for years or it may be for ever— with not the least hint of when the gradual reduction of which he spoke on his return from London might be expected. Added to this was a complaint of the "very miserable spirit" shown by those who oppose this part of the Government's policy. This type of complaint is becoming common, ,4- Jiilis . jvhjk age* the

Minister of Finance complained that the Press had not given the Government the support it should have, and on Wednesday Mr. Jull made slighting references to the members of the Importers' Federation packing up their typewriters and leaving the country. But Mr, Forbes should be more generous with those who cannot make quick changes of principle. They agreed with him in 1931 when he declared that "the high rates of exchange and especially the uncertainty as to the future movements in the rates are a considerable factor in the business stagnation that prevails," that high exchange had added to the weight of interest payments abroad and prevented prices and the cost of living falling as much as they otherwise would have done, and that it would not be long before any temporary advantage gained by the exporter would be "cancelled out in the higher rates and taxes, higher cost of goods, and the general reaction from slackness of trade," They agreed with him still when on November 19, 1932, he stated unequivocally that "the question of exchange is entirely one for the banks," and on November 22 "it is not the intention of the Government to interfere." But Mr. Forbes should make some allowance for those who have not kept pace with the changes he has since made. Yesterday he remarked that "the Labour Party is very loyal to its policy and if anybody gels out of step he is no longer regarded as a Labour man." Labour might retdrt with sonic justice that if Coalition supporters remain loyal to the policy of 1931-32 and do not change step as quickly as the leader they suffer a similar fate.