POLITICAL CRISIS

Gisborne Times, Volume LXXIII, Issue 11837, 19 January 1933, Page 5

POLITICAL CRISIS

PROPOSED INCREASE IN EXCHANGE. GOVERNMENT’S DECISION REPORTED REVERSED. RUMOURED RESIGNATION OF HON. W. DOWNIE STEWART. (Press • Association.* WELLINGTON, Jan. 18. A rumour of a big political crisis is causing great uneasiness in Wellington. The report is that the Government has reversed its attitude on the exchange question and has yielded or is about to yield to the demand for high exchange, arid also that after opposing' this attitude the Hon. W. Downie Stewart, the Finance Minister, has tendered his resignation from the Government. The Prime Minister, the Rt. Hon. G.. W. Forbes, when interviewed, would make no comment on the political position, and declined! to confirm or deny the report that Mr Stewart is resigning. The Rt. Hon. J. G. Coates also declined to comment, and Mr. Stewart declined to say anything for publication.

G ENERAL REHABILITATION PLAN. HIGHER EXCHANGE THE KEYNOTE. £Pi ess Association-* WELLINGTON, Jan. IS. There are one or two members of Cabinet .who have urged .that tho rates should be raised ever since the formation of the Coalition 15 months ago. The Prime Alinister has said all along that the matter should rest with the banks. However, when Cabinet settled down to formulate a plan of action after Parliament adjourned, it is believed that strong pressure was brought to bear within its ranks to secure the approval of a general plan whose keynote was the raising of the exchange rate to about 25 per cent. Added to this, it is- believed that the committee of three economists ' who have been, advising Cabinet recently liave repeated their assertions that the most effective relief for the farming community could be secured through higher exchange. In view of the attitude ol the banks, it is stated that, if the Government brought about an increase, it would have to take the responsibility of redeeming London funds which might accumulate. Apart from this, the Secretary to the Treasury estimated, in his addendum to tho Economic Committee’s report last February, that the raising of tho exchange would have an adverse effect- on the Budget to the extent of about £3,500,090. This responsibility, it- is understood, Air. Stewart, as Alinister of Finance, is not prepared to shoulder. The position at the moment is that he has defined ]iis attitude clearly to Cabinet, with a statement that lie cannot subscribe to tlie proposed policy. In view of the apparent determination of the Government to go ahead with its proposed programme. Air. Stewart is stated to have tendered his resignation.

HIGH ARTHRAL BANK RATE. PROTEST BY BUSINESSMEN. AIUST LEAD TO MORE TAXATION. t P reA ssoo.T: .tio n.' WELLINGTON, Jan. IS. The agitation by farming interests to raise the exchange rate was considered at a largely attended meeting of Wellington businessmen to-day when the following resolution was carried :

“That this meeting views with grave concern the advocacy of the Farmers’ Union in favor of a 25 per cent, exchange rate. It considers that the farmers’ conference is advocating, as some of the members present admitted, a high artificial rate, and that such rate being a false rate, can only he maintained by the Government guaranteeing the banks against the losses. Such, as undertaking must involve the Government in heavy expenditure, the exact amount of which cannot be determined, and which must lead to higher taxation.

MR STEWART BELIEVED

RESIGNED

NO OFFICIAL CONFIRMATION PRESSURE TO GET HIM TO ' REMAIN IN CABINET (Press, Association.) . WELLINGTON,. Jan. 18

Al though no .official. confirmation is given, it is believed that'the Hon, W. Downie . Stewart has resigned, as a member of the Ministry, being, unable to subscribe to the programme of emergency measures which it is proposed to - place before Parliament next week.'

Cabinet has been working at high pressure since its meetings were resumed after the holidays and it is understood that, within the past ten days, a majority of Ministers have 1 agreed, in a broad outline, upon its policy for presentation to the House. It has been stated freely in political quarters that .Ministers have’ no(.j been seeing eye to eye on certain questions on exchange rates. It is stated that Air Sowart has been a-t complete variance with the other members of the Ministry.

Mr Stewart has not attended Cabinet, meetings for some days, although he lias'had several conversations with other Alblisters in his room and he was not present yesterday when Ministers mat) 'representatives from the Farmers’. Union conference, which waited on Cabinet.to place various suggestions and opinions before it. Complete silence upon the question of Cabinet relations is being maintained by the Prime Alinister and other members, of the Ministry. In spite of the fact that staemeiits were being freely made that- All- Stewart bad tendered lira resignation, both leaders of tlie Government (Air Forbes and Mr Coates) declined l to bo drawn when questioned.

'When, asked if There was any truth in the statements being made, Air Stewart said h e would neither affirm nor deny The report that he had tendered his resignation. He said tho question was one for the Prime AUnister tio [discus's. Asked whether he would be prepared to contradict the statement that his resignation was in the hands of tho Prime Alinister, Air Stewart said that he would not do so , nor would he make any comment on the situaion generally. Air Forbes said that he had no intention of discussing the position at all. As no official confirmation has been given of the iact that Air Stcwait lias tendered his resignation, no information is available as to what attitude the Government will, adopt, if Air Stewart maintains his presentattitude. However, it is understood that the Coalition leaders, in an endeavour to maintain an Unbroken front, have been attempting to persuade Air Stewart to remain in Cabinet. Hu has been approached by several Alinisters- during -the past few days, but it is understood that he lia's remained firm and that lie is not prepared to take back bis resignation Although when Parliament adjoin lied six weeks ago. the Prime Alinister was insistent that the level of exchange rates was a question entirely for the banks, it is now stated reliably that the Government does not regard an increase in tlie rates at all unfavorably and there is reason to believe that the Government will shortly initiate a move to bring about a measure of exchange intlat-