HIGH RATE OPPOSED

New Zealand Herald, Volume LXX, Issue 21399, 25 January 1933, Page 10

HIGH RATE OPPOSED

GUARANTEE TO BANKS

RATIFICATION OBJECTED TO ELECTORS OF WAITEMATA Strong condemnation of the Government's action in bringing about an increase in the exchange rate of 25 per cent was embodied in a unanimous resolution passed at a meeting of electors of Waitemata held in the Chamber of Commerce flail yesterday. Opposition was expressed to tho Government's guarantee of indemnity to the banks, and the hope was voiced that similar resolutions would bo passed in each electorate throughout New Zealand.

The Mayor of Devonport, Mr. H. F. W. Meikle, who presided, said the Government had turned a somersault in a night. As far as local bodies were concerned, the amount of loan money domiciled in London was £17,500,000. The increase in the exchange rate would mean an additional payment of £2,500,000 on this sum. His borough would be called upon to pay an extra £650 a year. His council opposed the new rate absolutely.

Mr. R. A. Spinley, president of the New Zealand Accountants and Auditors' Association, said the farmers would benefit temporarily, but the aftermath would spell ruin to the country. Mr. J. Hisldp moved: —"That this meeting of electors, representing all districts of tho Waitemata electorate, expresses its strongest condemnation of the Government's unwarranted action in coercing the banks into artificially raising tho exchange and expresses its complete confidence in its member, Mr. A. Harris, and assures him that electors will solidly support him in taking any steps necessary to oppose ratification of the artificial raising of exchange and the guarantee of indemnity given to the banks." Mr., Hislop said that whether exchange would at the present rate was contingent on the Government's guarantee to the banks. The banks had warned the Government that there would be enormous losses on exchange purchases at 25 per cent, and the people were going to be asked to make those losses good. The banks could not carry on such a business unless guaranteed against losses.

Mr. A. G. Lunn seconded the motion and said the benefits which would accrue to the farmers were illusory. Mr. Gainor Jackson said he was convinced that, in view of the present trade balance, it would not be possible to sustain the increased rate for longer than six months.

In reply to a question tbe chairman said the resolution meant that the meeting would support Mr. Harris if he should vote against the Government on the question of indemnifying the banks. Mr. J. Guiniven, Mayor of Takapuna, said if a system of devaluation of land were introduced he was quite certain farmers would want no protection as suggested by the Farmers' Union and the Government of the day. Mr. S. E. Kennings, president of the Waitemata Chamber of Commerce, said no more condemnation was necessary than that the Government had acted in the face of technical advice. The motion was carried without dissent, and it was decided to forward it by telegram to Mr. Harris in Wellington. CREATING GREATER EVILS BANKING PRACTICE VIOLATED [BY TELEGRAPH —PRESS ASSOCIATION] WELLINGTON. Tuesday The Government's action in raising the rate of exchange was discussed in committee by tho council of the Wellington Chamber of Commerce this evening, and the following resolution of protest carried :

"That the council emphatically condemns the action of tho Government in violating established banking practices by causing the rate of exchange to be artificially pegged; that this action must inevitably create greater evils than the present action is calculated to overcome, and in the meantime the majority must suffer for the benefit of the minoritv."

DAIRY ASSOCIATION VIEW THANKS TO GOVERNMENT ["FROM OUtt OWN CORRESPONDENT] HAMILTON. Tuesday A unanimous vote of thanks for raising the exchange rate was passed to the Government by the South Auckland Dairy Association at a meeting yesterday.