EXCHANGE RATES.

New Zealand Herald, Volume LXIX, Issue 21116, 25 February 1932, Page 14

EXCHANGE RATES.

Sir, —In a statement on the exchange plan the Mayor of Wellington says that raising tho exchange, rate to 25 per cent, will mean intolerable hard'-hips to the. cities. Well, surely the cities can put up with a little of what the farmers have put up with for years. While the city people have been borrowing money to make life easy and pleasant and, in fact, living in a fool's paradise, with its artificially-raised high wages, and spending borrowed money 011 unproductive works, they have made it hard for the farmers to raise money for improving their farms, and thus increase production which, of course, would benefit the whole country. I noticed in another column that £455.886 has already been paid in rates in Wellington, which does not look like hard times. Some farmers will not he able to pay rates this year. Mr. Ilislop states that raising tho exchange rato to 25 per cent, will compel the raising of the rat-es by 50 per cent, and tho finding by Wellington of £154,450. I don't know how ho comes to this conclusion, but even if he is correct, compare the citizen's position with that of tho farmer whose income has dropped by about 50 per cent, with very little difference in the cost of production. Surely at, such a time as this tho town dwellers can deny themselves a few of the luxuries, such as cinemas, sports, superfluous clothes, etc. (which many farmers and their dependents never, or very rarely, enjoy), and put, up with a high exchange or some such measure while absolutely necessary. This will mean the saving from ruin of mnnv a farmer who, with his- wife and children, have a decidedly hard time of if. Nt the best of times. It is in times like this especially that we must remember to Live and Let Live. Sir,—To support their case, importers and others requiring funds in London find if necessary to make two statementsr (1) That exporters (nearly all farmers) desire the rate to be "pegged" at. between 25 per cent, and 30 per cent.'.(2) Tliaf; round about .10 per cent, is the rate justified by present financial circumstances. The first can lie at once dismissed as absolutely false. All farmers ask is that they shall get. fair, openmarket, value for their •■•goods and their money. If the second statement be true, why artificially interfere with (ho marketby "pegging" tho rale at 10 per cent, and forcing all exchange operations through the banks? As I have previously pointed out: When a farmer has produced butter or wool or meat and sold it in London for £IOOO, the money is his, and no one else's. And the money is in London—and nowhere else. These facts are beyond challenge and indisputably show the rights of the matter—in whatever direction expediency may lie. Should the exporting farmer desire to make a payment in New York or Paris or Capetown, it cannot lie imagined that our Government, would transmit the money for him at the expense of the general taxpayer. What justice is there, then, in our Government appropriating for the benefit of the general taxpayer tho premium value on transmission to New Zealand? Another point which appears to have been overlooked is this compulsorily forcing the business through the banks. Why should they be made a present of the profits on the handling of .these vast sums, whether the owners of the money desire it or not? In the total, a huge sum is to be taken from the scanty returns of the farmers for the benefit of banks, whoso profits are generally considered to bo already adequate. E. Eakle Vatle.