EMPIRE EXCHANGE RATES.

New Zealand Herald, Volume LX, Issue 18457, 21 July 1923, Page 9

EMPIRE EXCHANGE RATES.

AUSTRALIA AND DOMINION.

BANK CHARGES ATTACKED. ALLEGATION OF A COMBINE. By Telegraph Press Association-— Copyright. (Eeceived 6.45 p.m.) A. and N.Z. • LONDON. July 20. A high financial authority, interested in Australian affairs, calls attention in the press to the question of exchange rates within the Empire. He says it is now an article of faith with British statesmen that Empire trade should be encouraged in every possible legitimate way, but in one direction nothing has been attempted. India has a rupee currency, Canada the dollar, while Australia and New Zealand and South Africa have the pound sterling as currency. In the case of foreign currencies the daily fluctuating values of exchange are readily available to the man in the street, but in the case of British Dominions they are lumped together.

■ The great difference which the banks create between buying and selling rates over and above the legitimate charge for interest by banks in financing transactions constitutes a levy on trade with the Southern Dominions. • The average business man would think the variation in Dominion exchange rates might be caused by daily, • weekly, monthly, or, perhaps, more particularly, by seasonal fluctuations of trade. This is incorrect except possibly in the broadest sense.

The present rates for cable transfers were fixed by a circular from the combined Australian and New Zealand ' banks issued on November 6, 1922.

No one would suggest, continues the writer, that the balance of imports and exports from Australia and New Zealand to England, or vice versa, have remained unvaried since November, 1922. It can be stated that the charge for exchange is entirely regulated by the banks controlling trade with Australia and New Zealand. Every single bank engaged in this trade is in the combine, and they jointly regu- . late the exchange - charge at what seems good in their eyes. It is stated broadly that the bank charge for remittances t6 foreign countries does not exceed half-a-crown per cent, both ways, yet the bank combine controlling remittances to Aus- '. tralia «nd New Zealand charges 30s per cent. It stabilises the exchange at a price. This matter does not concern only merchants, manufacturers, and others engaged in Australian and New Zealand trades. They simply pass on the charge as an ' unavoidable expense. It . amounts to £1,000,000 yearly and concerns every man' and woman in Britain who wears clothes made of Australian and New Zealand wools, or who eats the products of the Dominions. It specially concerns every > raiser of Canterbury mutton, and beef, every producer and New Zealand or Australian butter or wheat. We all contribute unwillingly to it. The writer, without posing as an. expert, believes the adoption of Empire currency bills would undoubtedly stabilise exchange, tend to maintain it at parity, and reduce the banks' charge to a competitive rate. The present position simply means that there is no .freedom in. exchange. . Excessive charges, in _ normal times are a menace and danger in times of stress. The writer concludes: "Is the Commonwealth Government satisfied that the Commonwealth Bank should remain in this combine of Australian and New Zealand banks ? What does Mr. Bruce .say ? Is the New Zealand Government content, that the Bank of New Zealand, in which it is a large shareholder, should .remain in the combine, -levying excessive ; toll.' What does Mr,"Masscy say?' ' ■ , v:. <