EXCHANGE CONFERENCE.

New Zealand Herald, Volume LXIX, Issue 21118, 27 February 1932, Page 12

EXCHANGE CONFERENCE.

JOINT RECOMMENDATION.

A PRACTICAL SOLUTION. ATTITUDE OF PRODUCERS. WITHDRAWAL FROM AGREEMENT. The full text of the statement explaining the attitude of the Associated Chambers of Commerce of New Zealand on the exchange credits pool lias been received. It was issued in Wellington, after a meeting of (he executive, by the president, Mr. W. Maehin. It discloses that representatives of the association, the banks and the producers, after full conference, unanimously recommended an alternative scheme by which the Government could secure the financial accommodation it required, but that the producers, the following day, withdrew their approval of, these recommendations.

The reason for the issue of the statement. it is explained, is a widespread misunderstanding of the. motives of the Associated C'hanibeis of Commerce in carrying unanimously a resolution in favour of a free, open market for exchange, which has been in operation fot' years, and is an entirely different matter from a pegged high rate of exchange, such as is being advocated in some quarters. The confusion of these two separate and distinct issues in the public mind has led to the present misunderstanding regarding the attitude of the Associated Chambers of Commerce. The association does not advocate, and never has advocated, the artificial fixing of a rate of exchange, whether a high. or a low late, to which course it is definitely opposed. Investigation of Position. The association refrained from making any public statement when notice of the regulations governing the exchange credits pool was published on December 24 because it felt that the necessary information on which to base an opinion was not available to it. The association, therefore engaged for several weeks in collecting 1110 "-necessary information from the Government, the Treasury, the banks and i the producers. The statement says that on January 28 the executive unanimously passed a resolution and sets forth its contents with The remark that it is " now published for the first time." Actually, the full text was telegraphed by the Press' Association on January 29 and published throughout New Zealand. It included a proposal that the Government should convene a conference of tho banks, the producers and the commercial community with the Treasury. The Government acceded to the request of the association and called the desired conference. '1 his took place on February 11, and was attended by members of Cabinet, the Secretary of the Treasury, representatives of the banks, the producers, the municipalities and this association. Attitude of Producers. As a result of that conference a com-.i inittee was set- up. representative of the banks, tho producers and the association to explore practicable methods of securing a free exchange market, while securing to the Government the amount of funds it required ;n London. .1 he committee agreed upon a formula of an entirely practical nature, and this was the same day reported verbally to the Prime Mimstei and confirmed to him in writing by the Associated Chambers. It appeared that a way out of the present difficulty, acceptable alike to the banks, the primary producers and the commercial and industrial community, had been discovered. The members of the committee were to place before their respective bodies tlje recommendations they had agreed upon. These recommendations have been approved by the Associated Chambers, but the dav following that on which the committee of the three interests arrived at the joint recommendations mentioned, the producers withdrew from the agreement. The whole question has now been placed in the hands of a Committee of Economists. and it seems that this association can do 110 more in the meantime. ( onsequent on tho withdrawal of the producers and the appointment of the Committee of Economists the banks have not proceeded give detailed considci.ition to the recommendations. New Plan Not Disclosed.

Throughout the whole of t he negotiations the Associated Chambers has endeavoured to be helpful and constiurti\o in its proposals, and is desirous now of making public the exact nature of the recommendations made by the joint, committee. but this it is not permitted to do. The association is still of opinion that:--(1) There is no necessity for the present svstern of operating the exchange credits pool; (2) there is no necessity for the taking away from tho exchange market of that measure of competition which in tho past has been such a satisfactory check on exchange rates; and (3) there is no reason why the banks should insist that all export moneys should bo remitted to New Zealand, and all moneys for import requirements remitted back to London, thereby duplicating a large proportion of the exchange business. The association would have made its position plain before this, but it felt it could not make any statement because of the negotiations that were in progress. A letter has been despatched to the Prime Minister asking him to keep in mind the recommendations of this association when considering the report of the Committee of Economists, which recommendations this association considers to be a practical solution of the difficulty. The association is still prepared to bo of assistance in any way possible.