Professor Tocker Supports Exchange at Sterling Par

Grey River Argus, 24 August 1948, Page 5

Professor Tocker Supports Exchange at Sterling Par

CHRISTCHURCH, August 23. “There is a good deal to be said for restoring the exchange rate on sterling to parity,” said Professor A. H: Tocker, professor of Economics at Canterbury University College, yesterday. “Over a very long period the pound represented the same value- and was interchangeable, in many parts of the British Empire. It was a real advantage, not only to trade and investment, but also to common understanding and the integration of the British Empire. “If the old par rate was to be restored the time was certainly reasonably opportune, and. whether by accident or design, the change has occurred at the right time of the year, after one export season has ended and before another has begun. There are also disadvantages in the change that has been made, and it seems doubtful whether all these had been foreseen and considered. “When the rate was raised in 1933 the change created serious disturbances in industry. Then the change was to a higher, rather than a lower, price level. It is always easier to adjust traae and production to higher prices than to lower prices. Now the change and adjustment must be to a lower level, and it is greater in extent —20 per cent, as compared with 13 per cent, in 1933. “it is not possible to say what the effect on the' national income will be because overseas prices themselves are not stable. But whatever happens in the long run must mean that New' Zealand’s national income generally will be in terms of New Zealand money about 20 per cent, lower than it would have been had the rate remained at £125 to £lOO sterling. “While New Zealand’s main trade connections are with sterling and sterling is at present held at a stable exchange level with other countries, a good deal of doubt is felt whether the sterling rate with the dollar and other countries can be maintained. Britain’s overseas payments are far from balanced, and it is quite possible that, in spite of official efforts and intentions in Britain, the events may force a devaluation. If this should occur New Zealand might have to consider a further appreciation of her own currency to maintain some semblance of internal stability. “The 'fact of the matter is that exchanges in the world are badly out of joint and are unlikely to resume their former equilibrium and stability until production and trade are restored to higher levels and attain much greater freedom than they enjoy at present. In these conditions it would surely be wise for this country to consider seriously whether it should now link up with the International Monetary Fund established at Bretton Woods and co-operate with the rest of the world in trying to secure and maintain exchange stability, ”> Professor Tocker said in conclusion.

Australia to Build Ships for the N.Z. Coast Trade P.A. AUCKLAND, Aug. 23. Australia wants to build more ships for New Zealand. This desire is expressed by Mr Rex C. Ellis, the superintendent of the Newcastle State dockyard. Mr Ellis arrived at Auckland to-day from Sydney in the Aorangi. He said that the Australian shipbuilding industry developed rapidly during the war, and it was ready to tackle any task. It could, if necessary, complete any ship job without importing one single nut or bolt. Mr Ellis has come to New Zealand for a week’s discussion with the Union Steam Ship Company’s architects on the design of two freighters, which the Union Cnmpany has ordered from his yards. He said that they were the first New Zealand orders which his yards had received. The Union Company had ordered two 3000-ton vessels for its coastal trade. They would be almost identical with two others that are being built' in Britain.