EXCHANGE RATE.

New Zealand Herald, Volume LXIX, Issue 21130, 12 March 1932, Page 12

EXCHANGE RATE.

NO INTERFERENCE. GOVERNMENT'S DECISION, RETENTION OP POOL. - CONDITIONS IN LONDON. PEOSPECTS OP EELIEP. fBX TELEGRAPH. —SPECIAL REPORTER. "| WELLINGTON, Friday. "The Government does not propose to interfere with the rate of exchange and in the meantime does not consider it advisable to make any alterations in the regulations for effecting the pooling of exchange resources," said the Minister of Finance, Hon. W. Downie Stewart, in announcing the Cabinet's decision on the exchange question in the House of Representatives to-day. The statement was made in response to an urgent question by Mr. C. A. Wilkinson (Independent— Egmont) who referred to the apprehension caused to mercantile firms by the delay in announcing a decision. " I am fully alive to the fact that - the exchange question is causing much " concern to mercantile firms and others," said Mr. Stewart. "It is for this reason that the Government has given much time to consideration of every aspect of the problem and has made repeated effort® to bring about an agreement between all the interested parties. , So far, however, these efforts have not been successful, and in any case before any alteration in the present arrangements can be made the concurrence must be obtained of London interests which undertook certain obligations on behalf of the Dominion on the faith of arrangements made in New Zealand to meet the overseas emergency. In recent times many governments have found it necessary to take control of exchanges ,in much the same way as - the New Zealand Government found it - necessary to create an exchange pool owing to a sudden emergency arising in the London money market. The pool was created, not for the purpose of keeping down the exchange rate, but as a precautionary measure to see that adequate funds could' be purchased for Government requirements and that all exchange credits were conserved and used in the best interests of the Dominion.

"In a national emergency of this nature, national requirements must take precedence over private or sectional interests and some measure of restriction on individual freedom must inevitably be accepted in the public welfare. Conditions in the London money market are improving rapidly and if the present favourable' tendency continues, the Government may in due course find it possible to ge"t some relief from the stringent conditions •which rendered necessary the formation of the exchange pool. In this event reconsideration of the present conditions imposed in New Zealand will be possible, and I can assure the hon. member that the regulations ■will not be maintained any longer than is necessary to ensure Government requirements being met. "In conclusion I may say that the Government does not propose to interfere with the rate of exchange and in the meantime does hot consider it advisable to make any alterations Sn the regulations for effecting the pooling j of exchange resources."