Stabilisation Needed

Northern Advocate, 23 August 1947, Page 4

Stabilisation Needed

“Because money is banking up, stabilisation and price control have never been more necessary in the history of our country. “Unless all cooperate in this policy we will have a black market and prices will shoot through the roof.’’ This was the view of the committee which dealt with preference to United Kingdom products. Its chairman (Mr F. P. Walsh) said the best way New Zealand could assist Britain was for its., own economy to be sound. Any building up of sterling assets which might result would add to the current money supply within New Zealand to the extent that it was not offset by current imports, and this would create a situation requiring the continuation of stabilisation and price

control, stated the committee’s report. In accepting the policy of holding sterling balances or increasing them it should be recognised that the terms of trade between New Zealand and the United Kingdom were already adverse to New Zealand, and that any further adverse movement would further depreciate the value of New Zealand sterling balances, including the value of current sterling earnings, and undermine the economic and financial stability of New Zealand. The report also stated that in view of New Zealand’s policy of not embarrassing the United Kingdom Government by seeking world market prices for her produce, the terms of trade position must be taken into account in order not to impair her own internal stability.