Have Lost Confidence in The Government

Manawatu Times, Volume LVI, Issue 7066, 27 January 1933, Page 7

Have Lost Confidence in The Government

Commercial Interests Resent Increased Exchange

Times’ Special. WELLINGTON, Last Night. All sections of the commercial community were represented at a public meeting held in Wellington to-day, when an emphatic protest was made against the Government’s action in increasing the rate of exchange, New Zealand on London, to £125. It was intended that the meeting should be held in the Chamber of Commerce Hall, but this proved totally inadequate to accommodate all who wished to attend, and the meeting was finally held in the Bllte Triangle Hall. It is estimated that 500 were packed into the hall. In the course of speeches from leading representatives of commercial life the Government was severely taken to task over its recent action, and pointed references were made to the unexpected change of front made by the Prime Minister (the Right Hon. G. W. Forbes) in face of his previous statements on the exchange question. Both Mr. Forbes and Mr. Coates were' severely criticised, and speakers went so far as to say that they had lost confidence in the Government, and would not be able in the future to place reliance on the word of the Prime Minister. The attitude of Mr. Downie Stewart was endorsed, and he was vigorously cheered. Mr. Edwin Salmond, president of the New Zeaiand Importers’ Federation, was in the chair, and among those present were the Mayor (Mr. T. C. A. Hislop).

“I feel that Mr. Forbes has succumbed. to pressure, but as Prime Minister, he must take full responsibility for what he has done, declared the chairman. Mr. Forbes, so far, has held a high place in tho regard of the people of New Zealand. (A voice: ‘Question.’) We felt that he was a man of his word; that when he saw the right thing to do, he would do it, and would not succumb to outside pressure. I fear that to-day he has fallen from the high place he had in our regard. (Hear, hear). . s . . It is sad that a man in a moment of folly should throw away that regard. I don’t know whether he will ever read these remarks of mine (A voice: ‘He will read them all right.’) . . . hut it will he a matter of reflection for him in years to come, and I

will leave it at that.” “The next ac-tor is Mr. Coates. (Cries of Oh, Oh.’) I feel confident that it is Mr. Coates that we havie to thank for this act on the part of tho Cabinet. Has he by any chance got only one eye? It is certain ho can see only one section of th 3 community.” In this genius, he had said they would take the money from the community and give it to the section he could see. Was thene any chance of there being two Mr. Coates’s? “Where is the Mr. Coates who was 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 country.” “ Won’t Deceive England” There were two sides to every agreement, continued Mr. Salmond, and the other side to tho agreement that Mr. Coates made was that British trade should be allowied full play in New Zealand. When Mr. Coates returned he was full of what ho had done; 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 in raising the exchange has definitely broken the Ottawa Agreement. (Hear, hear, and loud applause.) There is no doubt about it whatever. . . . It won’t deceive the people in England.” “Betrayed Their Trust” Mr. Salmond said it was not yet too late; there was still ttime for Parliament to repair the error. (Hear, hear.) The leaders of the Coalition had entirely betrayed their trust. They had no longer any faith in them. “We say, ‘Retire and make room for cooler heads.’ (Hear, tear.) Our Parliament has to do its duty; what is to be dorue remains to be seen. But we hope that Cabinet may yet come to its senses. Mr. Forbes will say the exchango rate was increased for the benefit of the farmers. Do you believe it?” (Cries of “No.”)

the action which tho Government had taken was one based not merely upon

what he thought they might have believed to bo correct, from an exchange viewpoint, but was diametrically opposed to their solemn undertaking. Little Faitu Mr. Hislop said he knew something of tho inside working in the matter, that during tho vacation Cabinet was holding meetings and talking matters over with its three favourite professors. (Laughter.) It did not know any other professors. It took care to have them each time. While tho discussions were going on Cabinet sent for the Government nominees on the board of tho Bank of New Zealand and discussed the matter with them. Of course, that was not political pressure. (Ironical laughter.) That having been done, the pressure spread until wdien finally tho matter came before the Associated Banks they had no option, because the ground had been very carefully prepared, but to give way to political pressure but, of course, at a price which everyone in tho country would have to pay unless it was stopped. ‘ ‘Naturally the banks must have their indemnity for the losses they are bound to incur, and that loss will be put on to us by taxation, in addition to the indirect taxation arising from the inflated exchange. I think we can have very little faith in the judgment of the Government, and I say that with the greatest sorrow, because I had hoped we could, as a country, get behind the Government and help it to find a way out of our troubles.” Theory Against Fractice. When men were found taldng one view a month ago, and then, without conditions altering, taking a view diametrically opposite, then he would say their judgment was not to be trusted, Mr. Hislop continued.

“Which is the sounder?” he asked. “Tho opinion of a theorist or that of a man with great economic knowledge, who has made a life-long study of economic subjects and has years of practical experience as Minister of Finance; who also has had recently in London the advantage of consultation with the ablest financial brains in the world and who returned to say that tho idea of artificial inflation of exchango is wrong ? AVhoni would you rely upon ? “We are not beaten yet,” Mr. Hislop added. “This country at the moment is committed to the proposition that the politician shall control business operations. That cannot last, because if we as a community cannot stop it at some stage, economic forces themselves will stop it in utter confusion.” (Hear, hear, and applause.) Must Have Confidence.

Mr. Hislop said they had been tola by Australia that exchange inflation had been a benefit, but, ho pointed out, there had been political changes and tho spirit of confidence restored. It was only by getting away from the artificial and standing by the proved, that confidence would return. “With confidence you will get recovery,” Mr. Hislop concluded, resuming his seat amidst applause. At this stage an amendment was moved from the gallery that they should add to the resolution an expression of no-confidence in the Govern, ment, but this wus not accepted by tho chairman.

Mr. Salmond then neferred to the statement of the Leader of tho Opposition in which ho said that the financial institutions and stock and station agencies -would get tho benefit. All that the rank and file of the farmers would receive would be a credit noto saying that their indebtedness would be reduced, Mr. Salmond added. Was that any good? (Cries of “Yes” and “No.”) It had been said that their criticism was destructive, but he denied that. If it was necessary to assist tho farmer it would have been cheaper to have got the money from tho local market. Those moneys should be unattachable, and they should go direct to tho farmer and not be allowed to get into tho hands of the financial institutions. it could not bo assumed by Cabinet that tho bulk of the farmers were in favour of the increased exchange, if the bulk of tho farmers knew that what Cabinet had done was a breach of the Ottawa Agreement. Tho following resolution was then moved by Mr. Salmond:— “That 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 assurances of tho Prime Minister that the matter was one solely for the banks, and that there would be no political interference, is a gross and flagrant breach of public trust and confidence; and, secondly, that the fixation of the rate at an unwarrated high artificial rate is opposed to the interests and wellbeing 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 reprecussions from the adoption of such a policy must be dangerous and farreaching.” The Mayor, seconding the motion, said ho had been filled with feelings of dismay and consternation since ho returned to Wellington and found

The resolution was put to tho meeting, and carried by acclamation. “We will see that tho Government gets a copy of this resolution to-day,” remarked Mr. Salmond in closing the meeting.