NEW ZEALAND £ AND STERLING

Evening Post, Volume CXXI, Issue 17, 21 January 1936, Page 12

NEW ZEALAND £ AND STERLING

"MACHIAVELLIAN MOVE"

NEW GOVERNMENT'S POLICY

.(By Telegraph—Press Assn.—Copyright.) LONDON, January 20. The "Financial News" withdraws its ■ former criticism of the New Zealand Government's announcement that, notwithstanding inflationary expenditure on which it intended to embark, it would raise the exchange value of the pound to parity with sterling. The paper. says: "We must confess that we did less than justice to the intelligence and shrewdness of the Government's financial advisers, whoever "they-be. It is now evident that their announcement of a contradictory .programme was inspired by Machiavellian ingenuity, since it not only saved New Zealand from the consequences of a flight of capital, but actually led to a strengthening of trfe technical position of the pound." MAY NEVER APPRECIATE. It alludes to holders hastening to surrender sterling assets, and says: It . was an asute move on the part 01 the ' Labour Government. It will be more astute if the announcement is not_ followed by action, for appreciation 01 the ■pound would inflict hardship on most classes and will probably never occur. Meanwhile the Government enjoys the benefit of the absence of a flight of capital, a strong technical position, and ample monetary resources." The writer expresses the opinion that the British Labour Party would ■ not be able to follow New Zealand s example in the event of victory at the 'polls: "Such an ingenious method can be applied only once. The public are not'likely a second time to accept an . announcement of proposed revaluation at its face value."