MONETARY COMMITTEE

Nelson Evening Mail, Volume LXVI, 19 April 1934, Page 6

MONETARY COMMITTEE

EXISTING EXCHANGE RATE FAVOURED BY PROFESSOR TOCKER (By Telegraph—Press Association) WELLINGTON, This Day. The monetary committee continued its sittings to-day. Professor Toeker, professor of Economics at Canterbury College, in a lengthy survey of banking practice in New Zealand said special features of tlie New Zealand system had developed mainly to meet 1 lie needs of the country and the community. The present system appeared to be sound and flexible and very closely interwoven with- New Zealand’s economic life. It could be shown conclusively by official figures that over a period of thirty years bank credit had expanded in rough correspondence with the needs of production' and trade. He clid not support the view that arbitrary restriction of bank credit had ever been the cause of the depression in New Zealand. Deposits were by no means dependant on advances, and there was now no scarcity of bank money. Opinion favouring maintenance of the exchange rate at the present level was, expressed by Professor Toeker in evidence before the Monetary Committee. The .chief disadvantage of a reduced rate, he thought, would be that tlie national income, which was the source of all taxation, would be reduced and the. yield of taxation would also be reduced at least proportionately and nrobably more than proportionately, under present ‘ conditions ; also if advantage of the existing rate was removed it would bo difficult for the Government to withstand the demand for subsidising certain export industries.