EXCHANGE RISE OPPOSED

Hawera Star, Volume LII, 27 January 1933, Page 5

EXCHANGE RISE OPPOSED

GAIN IN FRUIT INDUSTRY

PROTESTS AT WELLINGTON MEETING OF BUSINESS MEN “BREACH OF PUBLIC TRUST.” FIXATION NOT WARRANTED.

(By Telegraph—Presa Association.) WELLINGTON. Jan. 26. The widespread feeling of resentment whcih has been aroused in the commercial community over the Government’s decision to raise the rate of exchange was strikingly evidenced at a public meeting of Wellington business' men to-day. It was an overflow gathe>rhig and the Government’s action was subjected to severe criticism, most of which was directed at the leaders of the. Coalition, -Messrs. G. W Forbes and J. G. Coates. A motion was carried condemning the Government for its action. The text'of the resolution was: “This meeting most strongly protests against the Government’s action in. arbitrarily increasing the exchange rate on london to 25 per cent, on the grounds firstly that such action, after the assurance of the Prime Minister that the matter was one solely for the banks and that there would be no political interference, is a gross end flagrant breach of public trust and confidence, and -secondly that the fixation of exchange at an unwarranted, high artificial rate is opposed to the interests and well-being of the Dominion as a whole. This meeting views with very grave alarm the decision to impose political control of the exchange rate and considers that the repercussions from the adoption of such a. policy must he dangerous and farreaching.” The principal speakers were Mr. 10. Salmond, president of the New Zealand Importers’ Federation, and Mr. T. C. A. Hislop, Mayor of Wellington. Mr. Salmond said the Government’s action in raising the exchange rate was dragging New Zealand’s name through the mire. Never again would New Zealand occupy the same place in the minds of English people. It was not vet too late. There was still time for Parliament to repair the error.

“SUCCUMBED TO PRESSURE.” “I feel that Mr. Forbes has succumbed to pressure,” said Mr. Saimond, “but as Prime Minister he must take full responsibility for what he has done. Mr. Forbes so far has held a high place in the regard of the people of New Zealand. We felt he was a man of his word and that when he saw the right thing to do he would do it and would nor succumb to outside pressure. I fear that to-day' he has faljen from the high place he had in our regard. “Where is the Mr. Coates who wa.. sent to Ottawa to conclude agreements with the. other Dominions and -England? When Mr. Coates went to Ottawa he was an Empire-builder and he signed an agreement with the English Government. When Mr. Coates leturned he- said an agreement had been made and it would be kept both in the letter and in the spirit. I say that the action of the Government in raising the exchange has definitely broken the Ottawa agreement. (Loud applause). There is no doubt about it whatever. It will not deceive the people in England.” Mr. Salmond paid a tribute to Mi. W. Downie Stewart, who, he said, would find (the great majority of people behind him. The Mayor (Mr. Hislop) said Lie country was committed to an utterly artificial exchange. It was committed to a proposition that the politician should 'control business Operations. “That cannot last,” he said, “because if we, as a community, cannot stop it at some stage, economic forces them selves will stop it in utter confusion.” BANKS HAD NO OPTION. • Ho knew of the insuic working of the matter, said Mr. His lop, in that during the vacation Cabinet was homing meetings and talking matters over with its three favourite professors. While the discussions were going on Cabinet sent for the Government nominees on the board ol the Bank of New Zealand and discussed the matter with them. “Of course, that was not political pressure,” Mr Hislop said, to the ironical laughter ol the meeting. “That having been done,” he continued, “the pressure spread until when finally the matter came before the Associated Banks they had no option, because the ground had been very carefully prepared, but to give way to poliCfcaF pressure, but of course at a price which everyone in the country would have to pay unless it stopped naturally. The banks must have then indemnity for the losses they are bound to incur, and that Joss will be put on to ns by taxation, in addition to the indirect- taxation arising from inflated exchange. “I think we can have very little faith in the judgment of the Government,” Mr. Hislop* concluded. “I say that with the greatest sorrow, because I hoped, we could as a country get behind the Government and help it to find a way out of our troubles.”

HOPE IN UPPER HOUSE. Mr. C. J. B. Norwood, president of the Harbour Boards’ Association, said the direct effect-of a 25 per cent, exchange would be an annual increase of £39,768 in the commitments of tlie boards. In New South Wales the Upper House had saved the country. He hoped if it was the last stage in New Zealand the Upper House would also save this country.

Mr. F. Campbell, president of the New Zealand Manufacturers’ Federation, said manufacturers were a. section of the community which would admittedly benefit to some slight degree by the increased exchange. It would come as an extra duty and would in some eases boost their sales. However, he wanted to make it clear they looked at the question from a national uoint of view and they believed it would not be the best thing for New Zealand. “I feel we eaA no longer trust the heads of the Government,” concluded Mr. Campbell, “and we support the resolution.” Sir' John Luke, referring-to the resignation of Mr. W. Downie Stewart, said it was decided at Ottawa that the question of exchange should be held, over till the conference to be held in London and the man to whom the Cabinet had looked for guidance had seen it necessary to resign. As far as the Government was concerned they had evidence during the last fortnight that they could not trust the word of the Prime Minister "and the community as a. whole had lost confidence in him.

An amendment was moved from the nailery to add to the motion an expression of no-confidence in the Government, but this w r as not accepted

oy the chairman and the motion before the meeting was carried.

WELLINGTON MAYOR CRITICAL INCREASE IN INTEREST BILL BONUS TO THE FARMERS. WELLINGTON, Jan. 2G. The. Mayor of Wellington, Mr. T. C. A. Hislop, when interviewed to-day, told a reporter that there would be an increase in Wellington’s overseas interest bill of between £15,000 and £16,000 and the indirect effect of'the exchange rate on sources of revenue would make it clear that Wellington would be about £25,000 worse off in the next financial year on account of the exchange inflation. There- were other items on which revenue would be decreased in the next financial year. So far as he could see at present the city would have £30,000 less than in the current year. The net result was that next year there would be available for carrying on the services of the city apparently only half the amount expended in the year immediately prior to the present council coming into office. One thing now quite clear was that after March 31 this year the council would not be able to carry on any unemployment relief works. That would have to be financed and controlled wholly by the Government. Last year out of revenue alone the council spent £B,OOO on unemployment relief. The exchange inflation wiped out definitely any possibility of the council carrying any unemployment in future. Perhaps Mr. Coates, as the- Minister of Finance, said the Mayor, would find that the burden he had created by his exchange inflation policy would be passed on to him to carry. “One matter I did not mention at the public meeting to-day,” said the Mayor, “was the inequality of Mr. Coates’ exchange inflation policy. Under it the farmers, no matter what their resources, are going to get the benefit at the expense of others. It is well known from the figures available in certain financial quarters that there are large numbers of New Zealand farmers who have on deposit sums of £IO,OOO, £20,000, £50,000 and more and yet these people are going to get a bonus at the expense of those unfortunate individuals who are without anything.”

NELSON DISTRICT SEASON. ESTIMATED 1 £40,000 BENEFIT. Discussing the exchange question with a “Nelson Mail” representative. Mr. J. H. Thorp, of the Horticultural Division of the Agricultural Department. pointed out that the net benefit to the fruit industry in the Nelson district this.season by reason of the hio-her exchange rate will be m the vicinity of £40,000 based on an export of 800,000 cases. All tli e overseas supplies for this season have already been purchased, but next season, it the higher exchange still operates, snrnlies from overseas, chiefly strawboarcl, paper and wire, will be penalised to the extent of 15 per cent Practically all the eases are made locally, so they will not be subject to the fluctuations of exchange.