MR NASH’S COMMENT

Grey River Argus, 20 September 1949, Page 4

MR NASH’S COMMENT

NX Pound to Stay At Sterling Parity Exports to Britain Will be Maintained WELLINGTON, Sept. 19 New 'Zealand would remain at parity with sterling, which meant that our currency would be devalued in terms of United States dollars to the same extent as sterling, said the Minister of Finance, Mr Nash, in a nation-wide broadcast this morning. The Minister’s announcement followed the 8.8. C. broadcast by the Chancellor of the Exchequer, Sir Stafford Cripps. Mr Nash said that as New Zealand had already restored its currency to parity with sterling there was no reason to use the present realignment of sterling with dollar as an occasion to make any further alteration. The New Zealand pound would be worth 2 dollars 80 cents. It might be that the overall effect of devaluation of the internal economy of New Zealand would not -be as great as would be expected and the effect on our price level and cost of living would not be great, continued the Minister. “Imports from the United States and from other countries wh=ch do not follow sterling devaluation will be dearer in terms of New Zealand currency, but on the other hand, our exports to those counties will produce more in terms of New Zealand currency. But as the great bulk of our trade is with the sterling area, these effects will be absorbed without appreciably altering our economy. “On the other hand, and this is the vital point, Britain has taken the important step of devaluation because taking every circumstance into account it will strengthen her economy to do so and help to expand her exports to dollar and other hard currency countries. To the extent that the United Kingdom benefits from this, New Zealand, with other countries o f the British Commonwealth and the sterling area will stand to benefit too. “Having regard to the fact that nearly all our exports go to the United Kingdom and a large proportion of our imports are obtained from Britain, it is undoubtedly in the best interest of New Zealand to make no alteration in our existing rates with sterling. The new rate will mean greater returns in New Zealand currency for goods sold for dollars and conversely higher cost in New Zealand currency for American goods. It must be remembered that if decisive action had not been taken things would probably have gone from' bad to worse, the dollar trade would have become chaotic and the United Kingdom may have been forced into deflation and a lower' price level, which may have involved unemployment and hard times for her people. Without the change made, it would have made it difficult for us to maintain prices for our .exports .although we have price protective clauses for two of our major products. “It should be emphasised that the devaluation of sterling is not a cure(,all,” said Mi- Nash.” “A complete solution can come onlv from building .up production in the sterling area and balancing its trade with the dollar area.”

N.Z. PETROL IMPORTS: DEARER? Rt. Hon. W. Nash stated a special inquiry was now under way to ascertain to what extent the petrol and lubricating oil position, so far as New Zealand is concerned, will be affected * the devaluation of sterling and New Zealand currency. It would take some time and the position would not be known immediately. { DOLLAR LOAN TO BUY U.S. FARM TRACTORS? Rt. Hon. W. Nash said the position regarding the proposed dollar lo.an was exactly and entirely dependent on the fact that equipment available in the United States and which is necessary to expand New Zealand production could not be obtained from any other country. Some of that equipment New Zealand could not do without. Licences would be granted for the purchase of farm tractors, but those licences might not necessarily cover all that was sought. Licences would be granted for tractors and heavy earth-moving equipment. SCOPE FOR PROFITEERING IN N.Z.! Rt. Hon. W. Nash said that the Price Tribunal would keep a check to ensure that the holders of goods from dollar areas already in New Zealand did not profiteer. He pointed out that prices depended not upon the date of importation, but upon the date of payment for goods. There might be goods already in the country for which payments had not already been made. ’ WAI HI MINE AUCKLAND, September 19 The valu e of gold in the sterling area is increased by about 43 per cent per ounce. Gold ’now will be worth about £l2. 3s, instead of £8 Bs. per ounce. The pound devaluation might mean reassessment of the position concerning the closing of the Martha gold mine, said the company’s local director and attorney, Mr. J. H.. G. Banks. No decision has yet been made though the decision to close down had been made, the company had not gone into liquidation. The remnants had proved fairly extensive and these were still being extracted. “We have few miners working now, but if we start up again others may be attracted back,” he said.