EXCHANGE PROBLEM

Evening Star, Issue 18339, 28 July 1923, Page 18

EXCHANGE PROBLEM

PENALTY ON DAIRY PRODUCERS. GOVERNMENT SHAKES PROFIT. VFbom Orra Parliamentary Reporter.] WELLINGTON. July 27. " Dairy factory directors,” stated Mr Hawken in the House to-day, “are much concerned over the high rate of exchange being charged by the banks for transmission of their balances from London to New Zealand.” He accordingly wished tho Minister of Finance to look into tho matter in the hope of obtaining relief. Mr Massey replied that there had been difficulty for some time over exchange from London to New Zealand, Mr Wilford: It is downright extortion. Mr Massey; “Yes, it may be; but the difficulty, of course, arises from the fact that the balance of freight is in one respect against us." Ho explained that the dominion’s exports greatly exceeded its imports, which was a matter fur congratulation from a financial point of view but it did make difficult tho question of transfer of money from England. Ho pave an instance of tho Government's experience within tho bust fortnight. There arose tho necessity to transmit £500,000 to London, and instead of having to pay tho exchange they got a premium of i 0 per cent., which meant £2,500 profit on the deal. Exchange rales on transfers to London varied from 20s to 25s per cent., which was a very awl,ward handicap, and he did nut see haw if could bo improved. lie had read tho statements of banking authorities on tho subject, and their suggestion for meeting the exchange problem within the Empire by arrangement for Imperial bills of currency. If it was possible to work such a system they might get over tho difficulty, though, if our imports from England increased that would solve the problem. However, there were financial reasons why it was not desirable to encourage over-importation. “ I am watching this carefully,” added Mr Massey, “ because it is a question of great importance to this country. It is almost certain to corns up at tho Economic Conference, at which I hope to be present.”