Free Exchange Opposed

Manawatu Times, Volume 64, Issue 109, 11 May 1939, Page 4

Free Exchange Opposed

Has Compensated Price Been Overlooked ?

NO CURE FOR DIFFICULTIES The opinion that the raising of the exchange rate was no solution to tho problems facing the fanner was expressed at the meeting of the Manawatu branch of the Farmers’ Union yesterday. It was decided to ask the committee consisting of representatives of the Farmers’ Union and the Sheep-owners’ Federation why the compensated price mechanism had been overlooked iu preference to the raising of the exchange rate, which would only aggravate the gaps between costs and prices. Many were saying that the only solution to the farmers’ difficulties was the raising of the exchange rate, said Mr. J. J. Wilde, who added that they must now look upon the exchange rate as a definite cost as regards production. If, for example, an implement was imported from England there were all sorts of charges to be met but tho main one was the cost of the exchange. Along with other charges it was handed on by the retailer and the final price was almost double. People were under the impression that if the rate went free it would iise to 140. What had to bo remembered was that the present rate had been capitalised. A free rate would have a tendency to rise before it fell thus restricting imports and having the same effect as a tarriff. “Very Dangerous Thing.” It was his opinion that it would allow the very position to come about that the Labour Government had desired prior to their first election to office when they said that they would bring down the rate of exchange. If the exchange went to 140 what would be the position of the farmers’ costs? They would be capitalised and then the rate would fall. The Government had instilled the purchasing power, which had been increased by other action than through prim ary production. They would like to ask that committee which was giving a definite lead to the farming industry over handling of meat if it was to stress the matter of letting the exchange run free. He thought it *a very dangerous thing and the farmers were going to be stampeded into taking action which was going to boomerang against them. No Permanent Solution. Prior to the raising of the exchange the farmers were in difficulties for a short time, said Mr. Beckett, and tho same thing was happening again. It would be no permanent solution. In fact as time went on it would become capitalised and if it fell they would be penalised. The remit, which was from Opiki, was worded as follows and it was decided to send it direct to the head office organi-

“That the suggestion of the special committee N.Z. Farmers’ Union and N.Z. Shpcp-owners’ Federation to lift the exchange is no solution to farmers’ problems, as it will further aggravate the gap between costs and prices, and that the only sound method of closing the gap is by the mechanism known as the compensated price, which is at the present time one of tho foremost planks of the union policy, and that an explanation be asked of the above committee as to why this procedure has been overlooked. ’ ’