"BANKS TO DECIDE"

New Zealand Herald, Volume LXIX, Issue 21344, 19 November 1932, Page 12

"BANKS TO DECIDE"

MB. FOIiISES' ATTITUDE

STATE'S PASSIVE PART DIVISION AMONG MEMBERS [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON. Friday The next, move in 1110 exchange i nto agitation is with 1 lie hanks, according to the view expressed by the Prime Ministcr, the lit. Hon. G. W. Forbes. this evening, when asked whether the representations made to the Government l>y the deputation of Coalition members on Wednesday would be carried further by the Cabinet. "The question of exchange is entirely one for banks and bankers," said Mr. Forbes. "It is for them to decide what is the best course to take in the interests of sound banking and of (he country. "Although iho Government is keenly interested to the extent that wo have to make heavy payments of interest overseas, we can take no moro than u passive part in the present controversy. '1 he representations which have been made to lis will be handed on to tho banks, and it will \he for them to decide if the rate is to bo increased. Wo shall accept their verdict, whichever way it goes." Banking and Politics Mr. Forbes said that New Zealand had always prided itself on the fact that banking was untouched by politics. In that respect the Dominion followed the ideal laid down by Lord Snowden. lie repeated that the barjts had accepted responsibility and that tho next move was with them. About 50 signatures have been obtained to the letter addressed to Mr. Forbes circulated among Coalition members of Parliament on Thursday evening. The letter contains a request that the exchange rate should be raised to 25 per cent. It is understood that a few more signatures will be secured. However, it is frankly admitted by those sponsoring the move to induce the Government to secure a higher exchange rate that unanimity on the question among Government members will not be secured. It is understood that Mr. A. Harris (Waitemata), Mr. R. A. Wright (Wellington Suburbs), Mr. A. J. Stallworthy (Eden) and Mr. H. Holland (Christchurch .North) flre definitely opposed to the move, while Mr. W„ A. \ eitch lias not yet clearly defined his f sit ion. One of the most uncompromising opponents is likely to be. Mr. C. A. Wilkinson, Independent member for Egmont. Labour Party Holds Aloo! One member who has taken a prominent part in placing the deputation's views before the Cabinet stated to-day that a preliminary counting of heads showed that there were 10 Government members definitely against raising the exchange rate. The Labour Party has decidbd that it will not enter into tho controversy meanwhile. It held a meeting to consider the position soon after the fact that the deputation had waited on the Cabinet was known, and it is understood that the party will again consider the question on Tuesday with a view to defining its attitude. Although there are some in the Labour Party who are entirely opposed to the raising of the exchange rate, it is understood that others take the view that some increase is warranted bv the present extraordinary conditions, holding that it would probably benefit local manufacturers. There is, of course, no definite prospect of the exchange question being raised in the House. BRITISH MANUFACTURERS PROTEST BY REPRESENTATIVES [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON, Friday The following resolution was passed at a meeting of tlie v council of the United Kingdom Manufacturers (New Zealand representatives) Association, to-day:— "This meeting strongly protests against any increase in the exchange rate. Even the present rate is not justified on account of the accumulated funds in London, and anv increase will be entirely opposed to letter and spirit of the Ottawa agreement. "CALAMITY IF SUCCESSFUL" CHAMBERS OF COMMERCE VIEW [by telegraph—press association] WELLINGTON, Friday The adamant opposition of the Associated Chambers of Commerce to the proposal to raise the rate of exchange was expressed to-day by the president of tho association, Mr. A. S. Burgess, of Wanganui, who is at present in Wellington. "Tho Associated Chamber views with the greatest alarm the present determined agitation to fix the rate of exchange at an artificially high level and strongly urges the Government and tho banks to resist the pressure being exerted to bring this about," said Mr. Burgess. "It will be a calamity if tho agitation is successful.

"My association long ago declared that the rato of exchange should he permitted to find its own level in accordance with supply and demand. The association is definitely opposed to the artificial pegging of the exchange rate, whether at a high or low level. Supply and demand at present do nut in the least justify a rate in excess of 10 per cent, if, indeed, they justify a rate us high as that, and to peg the rate artificially is inflation. "Such a step as proposed would have, a disastrous effect on business. Large firms have already stated it will mean they will have to dismiss psrhaps half their staffs and close up branches. Many concerns may be wiped out altogether. There will bo serious losses throughout business, heavy additions to the unemployed and no slight increase in the cost of living. The very class that is seeking to benefit, the producers, will meet tho reaction in thut the price of all commodities will rise, so that the exchange bonus they receive with one hand they will pay out again with tho other. "Moreover, pegging tho rato would be a grave breach of tho agreement marie at Ottawa, as it would have the effect of increasing a duty and placing a restriction on British industry." VIEWS OF MR. D. JONES REMEDY IN HIGHER RATE [nv TET.KCIUI'ir—SPECIAL hkportrh] INVE HC AKG ILL, Fridii v Speaking at a meeting of farmers today, Mr. D. Jones, chairman of the Meat Producers' Board, stated that the raising of the exchange rate was considered to be one of the best remedies for getting New Zealand out of her difficulty. "There is no better method of assisting the farmer to-day than by giving to us a rato of exchange not less Hum Australia," he said. The meeting passed a resolution urging upon the Government the necessity for an immediate raising of the rate.