FULL IN EXPORT PRICES

Evening Star, Issue 21315, 20 January 1933, Page 7

FULL IN EXPORT PRICES

WHY THE GOVERNMENT ACTED GOUHTERiNG EXCESSIVE DEFLATION [Per United Press Association.] WELLINGTON, January 20. The Prime Minister (the Rt. Hon." G. W. Forbes) announced last night that, following the adjournment of Parliament® the Government had been exhaustively reviewing the economic and financial position of the dominion, and particularly the serious predicament in which the primary producers now find themselves ■as a result of the further disastrous fall in export prices. The Government had caused a comprehensive review of the economic state of the country during the past year to be made, which indicates the serious nature of the position, and that it is becoming increasingly difficult in the light of the information thus disclosed: and as a result of a close survey of the position by the Government it has been decided that it is in the best interests of the country that the New Zealand-London rate of exchange for telegraphic transfers should be raised to £125 at the earliest possible moment, other rates to be raised correspondingly. The Government has further arranged with the commercial banks trading in New Zealand to cooperate with it in giving effect to this decision. At the same time an undertaking has been given to indemnify the banks against any losses that may be incurred on the 1 sale of exchange purchased at that figure, “ The Government recognises,” said Mr Forbes, “ the far-reaching nature of the decision which has been taken. The position of the dominion to-day and the sad plight of so many of our citizens, farmers and «unemployed workers especially, render it imperative that .some measure of relief should be immediately forthcoming, and lor these urgent reasons Cabinet believes that its action in this emergency is justified. It feels that the prfesent difficult position will be thereby eased, and that some of the hardships of excessive deflation will be avoided. The relief thus afforded will, in the opinion of the Government, result in mitigating the present unemployment position, and moreover will assist in bringing about a much-needed impetus to industry. It is with the sincere conviction that the proposed rate of exchange will benefit the community as a whole! that the Government commends this course of action to the goodwill of the people of the dominion.”