NORTHERN ADVOCATE DAILY WEDNESDAY, MARCH 21, 1934. THE EXCHANGE RATE

Northern Advocate, 21 March 1934, Page 4

NORTHERN ADVOCATE DAILY

WEDNESDAY, MARCH 21, 1934. THE EXCHANGE RATE

Registered for transmission through the post as a Newspaper.

The plight of the dairying industry in New .Zealand, and the suggestion that steps should lie taken to stabilise prices'of butter and cheese at a level which would allow dairymen to carry on successfully in Iho meantime, have brought the Dominion’s pegged exchange rate at 2o per cent, prominently under notice. 14 is obvious that any system of subsidising the industry cannot ,he operated effectively, and with fairness to the taxpayers, while the exchange is fixed at 25 per cent., as at present. Apart from the problem ns affecting the dairying industry, there is the fact that, according fo the ■“Financial 'Now's,” the Government ’s holding of surplus exchange in London has-grown in a little over a year to more than £20,000,000, and, is'still growing. It would indeed ho interesting to know what the high rate of exchange has cost the people of this country. The Finance Minister has made light of the comments of the “Financial News” and given an assurance that there is no need for alarm, hut 1 beyond this general statement no definite information is forthcoming. That tlio exchange rale must be lowered sooner or Infer may be laken for granted. The whole question is: How soon? The Prime Minister has stated that the rate will remain unaltered until the end of the present export-' sea soil. This is in accordance, with the promise made by the Government in order to give some measure of security to importers and others to whom any sudden change in the incidence of exchange would mean loss. Though it has been said that the high rate of exchange has not materially affected trading, it is difficult to accept such a statement, for it must bo clear that traders are restricting importations so that they shall not lie caught with high priced goods on hand. It may bo mentioned, in passing, though it is quite possible that the exchange cate may not he in any way responsible, that of 28 steamers which have sailed for New Zealand since the New Year, no less than 15 have carried no cargo, but have come out in ballast. This is a state of affairs which should not ho allowed to continue unnecessarily, and if the high rale of exchange can lie identified as a contributing cause, this constitutes one more reason why the removal of the pegging should lie hastened. It may be, of course,, that the high rate of exchange is, in the ultimate, working in the interests of the Dominion. If that he so, the Government would he well advised to give more information regarding the present situation than it has done.