HIGH EXCHANGE

Evening Star, Issue 21519, 18 September 1933, Page 8

HIGH EXCHANGE

PREMIER ON BRITISH VIEWPOINT N.Z.'S ACTION CONSIDERED MODERATE “ DON'T HORRY TO BRING IT DOWN " [Special to the ‘ Star.’] WELLINGTON, September 18. The Prime Minister’s first activity on entering the Cabinet room to-day was to grant an interview to your correspondent. He suggested that conditions generally were more cheerful, and he was glad to note on his return the great feeling of confidence in regard to the future of New Zealand. He enume rated the improvements m the prices of export commodities, adding that during the depression in England the prices of dairy products went much below the level justified, purely due to want of confidence. However, confidence had returned in Britain, and people were launching out on schemes long held in abeyance. Asked if he had raised the question of conversion ro lower interest on the dominion’s overseas debt, Mr Forbes replied that the money market was still subject to official oversight, and was being kept clear at the moment for Australian conversions. He did not doubt that similar facilities would be given the dominion when the time arrived for its conversion operations, and that the results would be equally satisfactory.

As for any prospect of anticipating maturity dates in Interest reduction, Air Forbes indicated that there had been no direct movement along that line. He reminded the interviewer ot the iomt statement of the dominions re garding debt burdens in relation to the low prices oi commodities, m which the opinion was expressed that an endeavour must be made to increase price levels to lessen the debt burden. “ This,” said Air Forbes, ” was considered the most effective manner to meet the problem. Our overseas debt conversion meanwhile is confined to the five millions short-dated loan maturing early next year. This is being handled by the Minister of Finance.” “ Will the Economic Conference be resumed F” was another question. Mr Forbes indicated that another gathering of the same constitution is extremely unlikely. Its resumption, he explained, was left in vague general terms, questions left unsettled being relegated to committees for investigation. He felt Uiat it would be impossible to get such a conference together again, and the matters probably would be dealt with in correspondence with the various na tions. Nor is there likelihood of an imperial Conference in the near future. Mr Forbes explaining that the present visit gave the Empire delegates an excellent opportunity of clearing up a number of questions. “ Yes, 1 did have a good chance ot viewing our high exchange policy from another angle,” said Air Forbes, when asked how New Zealand’s action was viewed overseas. “It was recognised that, m face of our internal difficulties, and what was done in other countries in the wav they took control of currencies, what we had done, was very moderate. “ I was asked what were the intentions of our Government, and replied chat we had endeavoured to restore equilibrium for our export farmers, and to stimulate exports under below oost conditions, and that as prices recovered our policy would be to gradually reduce the exchange. Bankers and others to whom this explanation was made, replied ‘ Don’t be in too jreat a hurry to bring it down.’ ” “ They felt,” continued the Prime Minister, “ that currencies all round were unstable, and it had been freelyprophesied by economists and others that the gold countries would be unable to remain on gold, so that currencies will continue for some time to be m a state of flux. This was a factor which blocked the business of the conference Nobody knew where the dollar was going to, and what other countries would do to protect .themselves against a depreciated dollar.”