THE EXCHANGE CONTROVERSY

New Zealand Herald, Volume LXIX, Issue 21344, 19 November 1932, Page 10

THE EXCHANGE CONTROVERSY

Excitement over the exchange question continues at a high level, though the position remains veiled in obscurity, qualified by the Prime Minister's repeated declaration that decision rests with the banks. To outward appearances there is rio special reason why pressure to have the rate raised and pegged at an artificial level should have developed so suddenly, or with such intensity. The plight of the primary producer and his need for assistance are given by the advocates as their reason for acting as they have done. His difficulties are veal and oppressive. The sheepfanner in particular because of the long-continued depression of wool values, and the fall in meat prices which came later to intensify his misfortunes, has a claim to the* sympathy of all. Dairy farmers are also suffering from a severely depressed market. But with all the siege the producers have had to stand over a long time—and have stood with admirable steadfastness—nothing has been shewn to prove a sudden crisis or emergency in their affairs demanding action without a moment's delay. Yet haste is stamped plainly on this campaign to have the exchange forced up by political pressure. And the only reason suggested for it is the desire to have the die cast before Mr. Downie Stewart and Mr. A. D. Park arrive back from London. Tf the exchange were to Vie raised, it would be most undesirable to see it done in such a way and for such a reason. There is no suppest.ion that the position regarding overseas payments warrants the increase. It is being pressed solely as a move to

help export industries. Nor is it suggested that the banks would act without pressure being applied. If, then, this is the position, it surely should first be shown, calmly and conclusively, that the rise in the exchange would do all that is claimed for it, and would have no detrimental after-effects. This has' not been done. The question remains controversial, and there is no que with the authority to settle it finally and' unanswerably. Similarly the change should be made, if it were to be made, with equal deliberation and calmness, without any appearance of haste, to forestall objections or to side-step obstacles. The contrary procedure adopted simply serves to make the proposal the more disquieting to those who, while fully admitting the difficulties of the farmer, are still unconvinced that exchange inflation is a sound or safe way of remedying them.