EXCHANGE RATES.

New Zealand Herald, Volume LXIX, Issue 21098, 4 February 1932, Page 12

EXCHANGE RATES.

Sir, —Tlio people who have conducted the campaign for inflation in New Zealand are of the same section that has just defeated Labour for the purpose of avoiding inflation. What do these people deserve?—certainly not good government. Let us hope the Government will really govern believing that there is a large inarticulate majority keen on preserving Uio credit of the country. E.L.R.

Sir, —The lecture delivered recently by Professor Copland is enlightening, and undoubtedly the professor dealt with his subject in a masterly manner from an academic 'point of view. But there are practical business men of experience who see a little further, and they know that inflation of any kind is a danger, and is one of the bugbears of trading. In rny opinion the professor, in discussing the improving state of Australian finance, gives too much credit to the benefit of high exchange. There are many other factors, not the least of which is economy of living. What is going to happen to Australia when the exchange starts to fall, perhaps in sudden drops of 5 per cent, to 10 per cent. '! The merchants, to whom the Government looks for most of its income tax, will immediately be compelled to write down their inflated stocks in order to compete with new imports, and any trader of experience knows that his profit and loss account suffers accordingly. The professor speaks of all classes bearing a proportionate amount of the loss, but does he see far enough and consider the deflation period ? How are the producers going to share the merchants' loss, which is bound to come later, with an inflated exchange ? H.G.T.