THE EXCHANGE RATE.

Evening Star, Issue 21638, 6 February 1934, Page 6

THE EXCHANGE RATE.

TO THE EDITOR. Sir,—ln a letter appearing in the Press recently on the question of the controlled exchange rate, it was pointed out that the amount received by the farmers by way of exchange—and in the case of wool growers this amount is now very considerable—was not new money coming into the country, but was really a tax actually phid by every man, woman, and child in tins country, for, as the writer of that letter pointed out, every man, woman, and child eat, drink and use in some way goods that come from overseas, and have to hear their proportion of that 25 per cent, exchange fixed by the Government. Now, sir, what excuse can a Government possibly have to-day, when the price of wool is again on a very high level, for assisting wool growers bv way of high exchange? As a matter of fact, wool growers are no longer entitled to this assistance; but, in the absence of any inclination on the part of tho Government to reduce the exchange rate, how is the general public of New Zealand going to get any benefit from too increased price of wool ? Might I suggest that the very first thing that should he done is that the Government should deal with the wool industry in the same way as it has dealt with the gold industry, which is on a payable basis—that is, impose an export tax on wool at the same rate of exchange (that is, 25 per cent.)—the amount of money received in this direction being used in tho reduction of taxation, and thus the whole of the community would receive some benefit, and the industry that is to-day doing very well would not be having a present made to it through the way of exchange at the expense of the balance of the inhabitants of New 7 Zealand. Of course, it might be argued that exchange should be reduced, but unfortunately the wool industry is the only one of "our export industries that appears to bo doing very well, and reducing the exchange the whole of our export industries would be penalised; so it seems that an export tax on an export industry as it roaches a payable stage would be a reasonable - way to offset the exchange problem until such time as tho majority of our industries arc doing well, and tho tax could bo abolished and exchange reduced. —1 am, etc., Ajax. February 5.