The Gisborne Times. THURSDAY, APRIL, 18, 1930. WIT AT HAS HURT TRADE WITH. BRITAIN ?

Gisborne Times, Volume LXXXII, Issue 12532, 18 April 1935, Page 4

The Gisborne Times. THURSDAY, APRIL, 18, 1930. WIT AT HAS HURT TRADE WITH. BRITAIN ?

It is difficult to credit a suggestion mode at this week's'meeting of the Chamber of Commerce—t)hnt it is feared at Home that the authorities in this Dominion may increase, not lower, the exchange rate on London. What may be the position is that, during the meat and produce negotiations in London, the question of the exchange rate had been used as propaganda by a section of the Home manufacturers and that extravagant statements have been put into circulation in the hope of influencing the attitude of the British Government. On. the other hand it may he a sly move to frighten business people in the Dominions into building up their, orders for the Homeland! As far as can be gathered, the bulk of the manufacturers in. .Brftaiin have not taken exception to this. Dominion or any other Dominion’s action in depreciating its currency. And why should they? All that has happened, as a result of the raising of the exchange i ate, is that the primary producers have benefited at the expense of the other sections.. The alteration, ) in the exchange rate has not lessened the. amount of currency within this Dominion. It would he quite a different matter if the difference between the value of the New Zealand £ and sterling had to be made good by the D'oaninitm’o overseas :su,p-, pliers. This, of course, i$ not the case, but widespread misconception still prevails on the point. Whether' the exchange rate should have been raised by a further 15 per qont is quite a different matter and one .that affects only the people of this country. The whole amount of the increase has never been justified, and is not justified to-day, i,f the matter be tested by the factors which,;, in ordinary times govern the fixing of the charge. On the’ other hand, the Governnieiit had no option hut to lend 'substantial .a,id to the primary industries. Good arguments might, no doubt, he, adduced toj show that if might liave been much better to have .adopted the subsidy sybtem as against a higher rate of' . exchange. In qither eyep.t, the .non-.. primary producers would have been called upon to assist 1 the prijnary producer. If this had n|t been done

by way of loan moneys instead of by taxation, the burden would, of oounse, have been less heavy as far as the non-primary producers would have been concerned. Strictly speaking, it cannot, bo definitely established by opponents at Home of high exchange, that, if the rate had not been advanced,, more people in this Dominion might have had more money to 'expend' on British manufactures, although it may appear, .on, the surface, that such might havo been the case. The day will, of course lie a happy one when the exchange into can bo substantially lowered, In this connection, it should be nqted that South Africa, which has not, had ,to depreciate her currency as much as the other- Dominions, has not, since, become an appreciably better customer for British manufactures. If the reverse had proved ,to be the position, it would have greatly strengthened the ease attempted to ho made out by dissatisfied manufacturers at Home. What is also not explained by opponents at Home of high exchange, is \yhy exception should be taken to the Dominions’ action and nothing adverse said in relation to. the action of the Dominions’ rivals—Argentine and Denmark, in particular—• in also depreciating their currency. The real facts of the matter are that trade with Britain by the Dominions has suffered through no fault of their own. If the Homeland had been in a position to offer higti-.-r prices for the Dominions’ produce, the Dominions would have been , able to have made much heavier purchases of . British manufactures Whilst, the buying power of the Dominions is restricted, caution dictates that their people shall not over-spend. In all the circumstances, it is a mistake for anyone to suppose that any branch of the manufacturers at Home is right in suggesting that the reduction in orders from the Dominions has been brought about on account of ,their policy in advancing the rate of exchange. The latest British Budget happily indicates that the Homeland is gaining much ground on the road to prosperity and the chances are that within the next twelve months the Dominion may be in a position to lower its ox change rate.