PEGGED EXCHANGE

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

PEGGED EXCHANGE

VICTORY FOR OPPONENTS. PREDICTION IN CITY CIRCLES. (By Telegraph.—Special to Standard.) WELLINGTON, Nov. 22. In the light of developments of the last 24 hours independent observers of the high exchange controversy are now prepared to predict with confidence that, notwithstanding the earlier forecasts that an alteration would be made at the end of the current week, the outcome of the agitation will be a victory for those who have opposed manipulation of the exchange. “The banks will not increase the rate after all,” is the definite statement made in well-informed circles. Following hard on the widely expressed fear that political persuasion would be applied to the Bank of New Zealand these prognostications give to the situation a turn as dramatic as was the original development, and as well invest the future with complications and, it is said; possible repercussions. On every occasion on which the Prime Minister has referred to the subject publicly he has insisted that responsibility for the exchange rates rested with the banks and that the matter was one entirely outside the Government or political intervention. While defending the Government’s right to consult its directors on the Bank of New Zealand at any time on questions of national policy he has categorically denied suggestions that an attempt has been made to influence the directorate on the present issue. “The Government is not bringing pressure to bear.on the banks,” Mr Forbes repeated this evening, when the point received incidental mention during the discussion of another subject. In the city the feeling is that the banks, have already answered the Government’s statement that the responsibility rests with them by declining to budge from the contention that the adoption of a bounty scheme is the proper method of assisting the farmer in his plight. The Government, of course; is openly hostile to the bonus proposal and adheres to its refusal to entertain it.

If, as is predicted by those most intimately acquainted with the developments, the Banks refuse point blank to interfere with the exchanges a position of stalemate will arise. Wliat then will be the next move? This is the question that is now going the Parliamentary rounds and in these circles it is suggested that the agrarian interests responsible for the agitation for an artificially high-pegged exchange will be obliged to take stock of their position before any further plan of action is considered. It is admitted that one unfortunate result of the skirmish has been to create an open breach between town and country interests which may have its clearest reflection on the floor of the House when the Central Reserve Bank legislation is under consideration.

FARMERS’ PROTEST. MASS MEETING SUGGESTED. Per Press Association. DUNEDIN, Nov. 22. At a meeting of the Otago Provincial Council of the New Zealand Farmers’ Union the following motion was carried: —“That the Dominion president be asked to organise without delay a mass demonstration consisting of one member of each branch of the Farmers’ Union to wait on the Government to stress the serious position, of the farming community and the urgent need of getting down costs.”