EMPIRE TRADE

Grey River Argus, 24 July 1923, Page 8

EMPIRE TRADE

QUESTION OF EXCHANGE BATES. LONDON, July 20. A high financial authority interested •n Australian affairs calls attention in the Press to the question of exchange rates within the Empire. He says: It is now an article of faith with British statesnren that Empire tiade should be encouraged by every possible legitimate means, but in One direction nothing has been attempted. India has a rupee currency, Canada the dollar, and Australia, New Zealand and South Africa the pound as currency. In the. case of foreign countries, Ihe daily fluctuations in the value of exchange are readily available to the man in the street, but in the case of the British dominions they are lumped together, .Ihe great difference which ihe banks create between buying and so]], ing rates, over and above a legitimate charge for interest by the banks in financing transactions, constitutes a levy on trade with the southern dominions. ’ ’' The average business man would think that the variation of the dominion exchange rates .might he caused by daily, weekly, monthly, or perhaps more particularly by seasonal fluctuations of trade. That was incorrect, except possibly in the broadest sense. Present rates for cable transfers weyo fixed by circular from the combined Australasian banks, issued in November, .1922. No one would suggest that the balance of imports and exports from Australia and New Zealand to Britain. or vice versa, had remained unvaried since November, 1922. MTt can be stated,” the writer proceeds, “that the charge for exchange is entirely regulated by the banks controlling the trade with Australia and New Zealand. Every single hank engaged in this trade is in the combine. They jointly regulate the exchange charge at what seems good to their eyes. Stated broadly, the bank charge for remittances to foreign countries does not exceed half a crown per cent, both ways, yet the bank combine coni'rolling remittances to and from Australia and New Zealand cliarges 30/per (-eut. It stabilises exchange at a price. “'Phis matter does not concern only the merchants and manufacturers and others engaged in .XustraL.sian rrade c . They simply pass on the charge us un avoidable expense. It amounts to millions sterling yearly, and concorrH every man and woman in Britain who wear clothes made from Australian or New Zealand wools, Or who cat the products ‘of the dominions. It especially concerns every raiser of Canterbury lamb, mutton or beef, every producer of New Zealand and Australian butter and wheat. We all contribute unwillingly to it.” The writer, without posing as an expert, believes that the adoption of Empire currency bills would undoubtedly stabilise the exchange, and tend to maintain it at parity and reduce the banks’ charge to a competitive rate. The present position, he concludes, simply means that there is no freedom in exchange, but exeossiw* charges in nc-r mal times and the menace of danger in times of stress. The writer concludes: “ T s ’ho Commonwealth satisfied that the Gn.-jj-nn-wealth Bank should remain in' this combine of Australian banks? Is the Now Zealand Government consent that the Bank of New Zealand, in which it is a largo shareholder, should remain in a combine levying an excessive toll? What does Air Massey say?”