SPECIAL SESSION

Manawatu Standard, Volume LII, Issue 305, 23 November 1932, Page 7

SPECIAL SESSION

PARLIAMENT MAY SIT IN FEBRUARY. .WATCH ON ECONOMIC SITUATION. (By Telegraph.—Special to Standard.) WELLINGTON, Nov. 22. There is now every probability that the Government will be obliged to summon a special session of Parliament in February next to pass emergency legislation designed to check the anticipated trend of the economic situation. This point was made clear by Rt. Hon. G. W. Forbes when briefly discussing the outlook in an interview to-night. The Prime Minister, in reply to questions, said that naturally the Government was hopeful that the necessity would not arise for calling the House together again in the New Year, but on the present indications the possibility of an early emergency session could not be ignored. He was afraid that one would be necessary if the country’s trading position did not show some sigjns of improvement. Mr Forbes emphasised that the whole question of whether an emergency session would be necessary would be determined by the condition of New Zealand’s oversea markets during the next two months. “That,” he said, “is the key to the whole situation. We are hoping to conclude the business of the present session before Christmas—our plans provide for that —and no one will be more pleased .than the Government if Parliament does not have to meet for its third session before the normal time in June, but if the price levels of our primary products continue to fall we will have no option but to take immediate steps to maintain the national income.” It was suggested to Mr Forbes that, in anticipation, of the development of such a set of circumstances as he had mentioned, it would be possible for the Government before the present session ended to formulate the necessary policy, translate it into legislation and reserve authority to bring the provisions into operation by Order-in-Coun-cil ii and when an emergency arose. The Prime Minister replied that the scheme would be impracticable on account of the amount of detail which would be involved in the emergency measures which might have to be adopted. VIEWS ON LOW INTEREST RATES. Invited to elaborate the references to internal interest rates which he had made to the importers’ deputation during the morning, Mr Forbes explained that by interest rates he meant all classes of interest—the bank rate of interest, interest on mortgages, interest on debentures and other securities and the rest. There was no doubt in hi 3 mind, lie added, that interest rates in New Zealand were still too high. He had in mind especially the rate of interest on loans. If the national revenue continued to decline the question of making further reductions in interest would have to be considered. Mr Forbes contended that 5 per cent.—the rate the Government was at present paying for money “over the counter”—was too high, and he observed that even at that rate the State found it difficult to obtain funds. Incidentally, he mentioned that one of the objections the Government had to payment of a bounty on production as suggested by the banks was that .after the public had subscribed to a loan- — had responded to an appeal at a certain interest rate—it might be found necessary subsequently through the development of an economic crisis, to arbitrarily reduce that rate. He considered as Prime Minister that he would not be acting fairly to the country if he allowed the Government to place itself in such a position. Asked whether further wages and 6alary cuts would take their place alongside interest reductions in any future economy measures, the Prime Minister replied that the question had not yet arisen. He added that further Parliamentary action in that direction 'was not necessary since, under the operation of the amendment to the arbitration law, reductions had been made to what might be termed the adjustment level.

PROPOSAL TO SET UP COMMITTEE. CONSIDERATION OF ECONOMIC PROBLEMS. Per Press Association. WELLINGTON, Nov. 22. When the House of Representatives met to-day Mr H. E. Holland, Leader of the Opposition, gave notice of intention to move that a special committee representative of all sections of the House be set up to inquire into the most effective means of meeting the existing economic difficulties, and that such committee take into considThe restoration and stabilisation of the purchasing power. Guaranteed prices. Raising of income for farmers and •wage-earners, employed and unemployed. Exchange rates. Effective utilisation and organisation of currency and credit. Bounty, subsidy or bonus to primary producers. And the establishment of a moratorium. . , ~ The committee to report to the House within 14 days. OPINION IN THE LOBBIES. “DRASTIC ACTION IMPERATIVE.” Per Press Association. WELLINGTON, Nov. 22. It has been known in the lobbies for some time that the Government lias been concerned with the trend of events following the recent decline in prices after the temporary recovery. The return of Hon. W. Downie Stewart late in the session makes it difficult to deal with the situation this year, but the opinion is growing that further drastic Government action is imperative early in the New Year. Mr Forbes’s remarks to the deputation that interest rates have to come down indicate that legislative action in this direction is likely. Questioned concerning Mr Holland s proposal concerning the setting up of a special committee of experts and economists, Mr Forhes said the Government did not consider the establishment would he of any great use in meeting the country’s difficulties. Labour had not taken part in the last investigation, putting all the responsibility on the Government.