A VERY SHREWD MOVE

Northern Advocate, 21 January 1936, Page 4

A VERY SHREWD MOVE

LABOUR GOVERNMENT AND EXCHANGE (Received 10 a.m.) LONDON, January 20. The “Financial News” withdraws its former criticism of the New Zealand Government’s announcement, that, notwithstanding the inflationary expediture on which it intended to embark, it would raise the exchange value of the pound to parity with sterling. * It says it must confess it did less than justice to the intelligence and shrewdness of the Government’s financial advisers, whoever they may be. "It is now evident the announcement of the contradictory programme was inspired by Machiavellian- ingenuity, since it not only saved New Zealand from the consequences of a flight of capital, but actually led to a strengthening of the technical position of the pound.” It alludes to holders hastening to surrender sterling assets, and says it was an astute move on the part of the Labour Government. “It will be more afctute if the announcement is not followed by action,” the article proceeds, “for an appreciation of the pound, which would inflict hardship on most classes, will probably never occur. Meanwhile, the Government enjoys the benefit of the absence of a flight of capital, a strong technical position, and ample monetary resources.”

The writer expressed the opinion that the British Labour Party would not be able to follow the New Zealand example, in the event of a victory at the polls. The ingenious method can only be applied once. The public is not likely, a second time, to accept the announcement of a proposed revaluation on its face value.