HIGH EXCHANGE CRITIC.

Manawatu Standard, Volume LIV, Issue 291, 7 November 1934, Page 7

HIGH EXCHANGE CRITIC.

REPLY TO SIR FRANCIS BELL. FINANCE MINISTER’S STATEMENT. Per Press Association, vWELLINGTON, Nov. 6. The remarks made in the Legislative Council by Sir Francis Bell in criticism of New Zealand’s exchange policy were replied to in a statement issued to-night by the Minister of Finance (Rt. Hon. J. G. Coates). “I was surprised to find there had been a revival of the extravagant language which used to be employed by those opposed to the high exchange rate,” said Mr Coates. “Sir Francis Bell’s remarks are amazing, not only for their appeal to prejudice, but also for an absolute incorrect statement of facts. He even stated that our national debt had increased by £25,000,000 mainly on account of the high exchange rate, and that if this continued for three years it would be well past the £70,000,000 mark. The simple truth is that the addition to the long-term debt last year was £1,277,394. This sum was mentioned by Sir Francis Bell in the same breath ag his question as to whether the debt was to be increased by nearly £26,000,000 annually. “The short-term debt has been wiped off by the sale of sterling to the Reserve Bank, which gave the Government £25,000,000 in New Zealand currency in exchange for £20,000,000 sterling. The greatest loss that could be incurred on this sum, to use the extremely unlikely supposition of a return to the old parity, would be £5,000,000. Attention should, however, be drawn to the fact that sterling is now being used up by importers. It should be noted that Australia is contemplating raising loans for funding part of her huge short-term debt into long-term. Sir Francis Bell has not kept up with the situation. “I hope it is the last time I must repeat that the high exchange internally cost last year only the interest on Treasury bills, that these Treasury bills are now entirely paid off, and that this year no debt, short or long term, will be incurred in respect of the high exchange rate,” the Finance Minister concluded.