THOSE LONDON CREDITS

Matamata Record, Volume XIX, Issue 1789, 7 December 1936, Page 5

THOSE LONDON CREDITS

IMPORTANCE OF EXCHANGE Being Nursed by Government An explanation of the Government’s refusal to listen to requests for a high guaranteed price and a high basic wage was given by Mr. J. G. Barclay, M.P., at Matamata on Monday. The speaker said that some farmers asked for Is 4id as a guaranteed price, and some workers for £6 or £6 10s as a basic wage, but those were wrecking prices and could not be established immediately - without smashing the exchange rate on London. Exchange in the Central Reserve Bank in London totalled £16,000,000. The private banks held about a similar amount, but the Government could not quite estimate the total. There was against this something like £20,000,000 lying to the credit of English firms in New Zealand, which was being kept here against the time when the exchange rate would fall. With basic prices as were proposed, the demand on London credit would cause the £16,000,000 to be eaten up and the Dominion would then not be in a position to meet the credit of those overseas firms which was lying in New Zealand. Thus the credit of ster'ing which was held in London by the Government was being nursed. Again, if the guaranteed price were raised as some wanted, there would be an orgy of land speculation. There was a land problem as well as a money problem. Some supporters of Douglas Credit were impatient, but he was certain that if they were in power to-morrow they could not do the things they said they would do immediately, but would move cautiously, as the Labour Party was doing. One false step made in regard to finance would wreck the exchange rate on London and ruin the finances of the Dominion.