EXCHANGE CREDITS POOL

Evening Star, Issue 21007, 22 January 1932, Page 13

EXCHANGE CREDITS POOL

; « OPPOSED BY PRIMARY PRODUCERS } : OTAGO INTERESTS CONDEMN PROPOSAL ■'*' Strong protests against the establishment of the proposed exchange credits’ pool were voiced yesterday afternoon at a largely attended and represented meetings of Otago primary producers in ‘the R.S.A. rooms. Mr C. 11. Sheat |(provincial president of the Farmers j Union) was in hte chair. The Chairman stated that he had received an apology from Mr James Begg, : president of the Otago Executive New. Zealand Sheepowners 1 Federation and a member of the. Meat Board, who was out of town. Mr Begg was wholeheartedly with the meeting m any action taken to discourage Government interference with the exchange. In Mr i'Begg’s opinion the primary producer ,was entitled to the full value for the credit which he established in London ' through his exports, and he expressed the hope tliat the meeting would voice ■ its disapproval of the proposed Govern;xnent action in no half-hearted manner. ‘He had also received apologies from Mr ; M. A. Kinney, of Hyde, vice-president, . Otago Provincial Council, N.Z.F.U., 'and Mr J. A. Johnstone, both of whom • were strongly in favour of a free exchange. Mr A. E. Ansell, M.P., who •, had intended to be present at the meeting*, had unfortunately been called out of town on business. The proposal, said : Mr Sheat, was one of the greatest im- ■ portance to the primary industries. In ' its difficulties to meet its Home obhga- • tions the Government had gone to the I banks, which had asked for complete ! control of the exchange. It bad been ; the policy of the Farmers’ Union that; ' the economic conditions should be al- ; lowed free play, and they were now demanding free play on tlie question or .exchange. Some time ago, a very influential deputation had protested to the Prime'-Minister against any mter- > ference with the fixation of exchange. They had every sympathy with the Government’s desire to balance the Budget, . but considered it an imposition that ; the.producers should be used for such a ' purpose. The Otago producers should yoice gn emphatic protest. 111 moving “That this meeting, representative of every section; of the , primary producers of this province emphatically protests against the_ action of the Government in so arranging the ■ Exchange Credits’ Pool as to artifically peg the rate of exchange; in the opinion of this meeting the rate of exchange should follow its natural course,” Mr Fred, Waite said there might be grave discontent in the cities to-day, but he was not exaggerating when he said that the farmers were ; very concerned, though, perhaps, they , Were not so vocal as the city inhabitants. Once the exporting farmers got : into difficulties the whole of New Zea- : land was in difficulty. The country s ■ structure was based on primary pro- : auction.' The obtaining of better prices ’ was very difficult, as was also the ques- | tion of reduction of costs. In Novem--1 ber last, prices were 10 per cent, below i 1914 values, while costs showed a 50 . per cent, increase. Notwithstanding a : strong land settlement policy, there ‘ were fewer people on the land to-day ' as compared with two years ago. The i whole of the imports to New Zealand ! were paid for by the exportshow- • ever, he would not suggest that the exporter was-the_only valuable man in the country, but ho was the outstanding valuable man. Because New Zealand could not borrow in London an unusual Situation had arisen. The establishment of credits by borrowing was closed, so New Zealand had to establish credits by exporting. Consequently he suggested that the exporters should have the full'value of the credits they Were establishing. The new rate was to be fixed by the Associated Banks, the Minister of Finance- to be called ip if any difficulties arose. If the rate of 8i had, existed i for the past twelve months it was-obviously too low. Ihe importers, who included the Government, were interested in keeping the rates down. He was not one who wished to attack the banks with an axe, but there was a feeling throughout the country that the banks were not giving everybody a fair run. If the banks could arrange with the Government for all exchanges to pass through their hands, a greater volume of business would result. If the primary producers had to abide by the law of supply and demand in their marketing the same law should also be applied to exchange. Until the difficulty of keeping the exporting farmer on the land was solved the hospital boards would be worried, and demonstrations like that recently in George street would continue. The proposal now was to deny the exporters the credits they were establishing in London. , Mr William Lee, a member of the Dairy Control Board, seconded the motion, He attacked the proposal on broad principles. The move showed how dependent the Government and tho whole country were on Jthe farmers, even to meeting the dominion’s commitments in London, and also showed the foolishness of extravagant borrowing. The farmers were not asking for ' a favour. The burden of the slump was being thrown on the farmers, while other sections were allowed to go free. The proposal was, in effect, to rob the farmers of £10,000,000; it reminded him of the man who gave his children a penny each to induce them to go to sleep, and stole the pennies while the children were asleep. The Government had taken a short view and the long road back to economic recovery. The fixation of the exchange had been debated. but he would ask them to accept the views of an expert. Professor Copland, who said freedom of exchange movement would be in the best interests of the country, and would be some compensation to the producers for reduced incomes. A high exchange rate, according to Professor Copland, was one of the best means towards recovery of an exporting country. Mr Lee said he had it on good authority that land tax, interest on advances and Crown rents were greatly in arrear, and he was certain that if the Government allowed a free exchange the farmers would be in a better position. The rationing of imports would follow a high exchange, and once again the law of supply and demand would become effective. They asked for more business in Government, and less Government in business. If a Labour Government were in power and had done such a thing as the Coalition Government was doing when the London borrowing market was closed to it. Labour would have been “ black-balled ” throughout the country. • Its act would have been called Communism. Mr H. Turner, president of the Otago A. and P. Society, said the society, which was non-political, joined in the protest against tho Government meeting its obligations in the way proposed. Tho method suggested was not equitable. They were told that it was only the exchange-rate of 25 per cent, that was keeping the Australian producers on their farms, and any exchange benefits would assist Now ZeaJjmd fanners, so much along the

road to prosperity but to keep them out of bankruptcy. Tho dice was loaded against the producers in the matter of costs and the law of supply and demand governing the prices obtained. The New Zealand fruit representatives at Home were very much concerned over the market prospects, as the Australian growers, with a high exchange up their sleeves, were enabled to undersell the New Zealand products. Mr C. R. Smith described the Government’s action as an imposition. If exchange were allowed to run its free course, the Government would be asked to pay £3,100,000 additional for its commitments in London. Only 50,000 farmers were being asked to pay that on behalf of 1,500.000 people.' The farmers would receive in London £l3O for every £IOO of butter or other produce sold if the exchange were allowed to follow its course. The whole of tho people should be asked to meet the obligations. Tho farmers considered it a “ steal ” that Government and local bodies should step in and take 20 per cent, of the money earned by the farmers on the London market. If tho farmers wore placed on an equal footing in tho matter of costs with the city people, they would not object to sharing tho exchange.- The Government’s act was altogether wrong. The farmer was entitled to his just right in taking the whole of the exchange. Mr W. Moore (Momona) said a strong Government platform plank was to place settlers on the land. They were now finding it easier to put settlers off the land. The Chairman said that the exchange might not rise to 30 per cent., hut fixation would make exchange an artificial thing. A Delegate. There is no chance of the exchange going up if the Government sets up a pool. _ Another speaker said there would bo much in the farmer keeping his head if the exchange, went up. Mr S. Sim said an exchange rate of 25 per cent, would allow him to carry out top-dressing. If the Government refused to interfere with the exchange, the farmers would be assisted. Mr D. Gray said that if the exchange went to 30 per cent, the Government would have to raise £4,000,000, and taxation would increase. The farmers would not then obtain the full benefit of the exchange. Mr J. D. Revie said he considered the fixation was the action of a “ Bolshie ” Government. He could not have believed there were men in the Government who could take such a drastic step to impose on the primary producers. If some of the primary producers’ recommendations of past years had been acted upon, the Government would not be in its present position. The farmers would have to adopt different methods to obtain justice. In the past they had gone cap in hand to the Government; other sections had followed the same course, and had got nowhere, while other sections were more militant and succeeded. If the farmers sat back arid took everything handed to them, thev would be compelled to carry the whole burden. The “autocratic Bolshie ” Government said the farmers were carrying the country along; hilt how long would they allow the farmers to carry on? He urged that a strong deputation should wait on tho Government. The farmers would have to show that they were determined to get somewhere. He felt that much time spent in the past in making recommendations to tho Government had been wasted. Less apathy should bo shown by those who carried resolutions. Mr Smith moved, as an amendment, that a monster meeting of farmers be called before the resolution was forwarder! to the Government. He considered that the bald resolution would be placed in the waste-paper basket by the Government. The Chairman said the proposed amendment would be accepted as a separate motion. The motion was amended, on Mr Waite’s suggestion, to read—“ That this meeting, representative of every section of primary producers of this province, emphatically protests against the action of the Government in arranging the exchanges credits pool. In the opinion of this meeting, the rate of exchange should follow its natural course.” '•'bp motion was carried unanimously. As the feeling of the conference was that a monster meeting would not be a success, Mr Smith withdrew his motion. It was stated that most farmers were unable to leave their farms. Mr A. Craig (Greenfield) expressed regret that the members of Parliament invited to the meeting had been attended to hear the farmers’ case. A suggestion that all branches of the Farmers’ Union and other producers’ organisations shank! he circularised and asked to support the* conference’s resolution was adopted. Mr Waite urged that the meetings should be held immediately, as the exporting season was now in full swing. A speedy protest was essential. The Chairman said Cabinet was comprised of a preponderance of farmers, and thev should be willing to listen to the producers’ claims.