THE EXCHANGE QUESTION.

New Zealand Herald, Volume LXIX, Issue 21116, 25 February 1932, Page 10

THE EXCHANGE QUESTION.

Another statement of its views upon the exchange pool has been issued by the executive of the Associated Chambers of Commerce. As a pronouncement by an organisation professing to speak for the commercial community, it is surprising and disappointing, not because it declares opposition to the scheme, but because of the poverty of its contribution toward elucidation of the problem. Tts authors have so little confidence in their criticism or are so doubtful of its validity that they have simply repeated, almost literally, the text of part of the resolution passed by them on January 29. As long ago as that, the executive considered that "simpler and better plans could have been devised" to meet the necessities of the Government, but neither then nor now have they suggested the form of those plans. They still insist that there is no necessity for the present system, but they give no reason for thrft opinion. The only aspect upon which any positive criticism is made is that those who are both exporters and importers are subjected to inconvenience and expense, a point that was observed immediately upon the announcement of the scheme. Something better than this is expected of the Associated Chambers of Commerce. As representatives of the

business knowledge of the Dominion, they should be able to analyse the exchange position in all its practical bearings, to discover whether the rate is artificially pegged, to decide whether orderly management of exchange operations is conducive to the best interests of the Dominion. These questions are all ignored by the association ; it merely presents a dogmatic assertion of its opinion, vaguely hints that it has its own solution of the problem, and by implication claims that because it is issued with the .authority of the Associated Chambers of Commerce, this pronouncement should be accepted without question. The futility of such pretensions is demonstrated by the exhaustive report obtained from Professor Gregory by the National Bank. In a document that is as closely reasoned as it is dispassionate, Professor Gregory illustrates all the effects of an increase in exchange rates and reveals the absurdity of basing a decision or proclaiming an opinion upon a single aspect of the subject. No one who studies his report carefully can avoid the conclusion that he presents an overwhelming case against an experiment promising only temporary and limited advantages at the expense of harmful consequences, the nature of which can be definitely foreseen but the magnitude of which cannot be controlled.