EXCHANGE POLICY

New Zealand Herald, Volume LXX, Issue 21404, 31 January 1933, Page 10

EXCHANGE POLICY

OPINIONS IN THE HOUSE KEEN DEBATE EXPECTED HON. W. D. STEWART'S ATTITUDE [bit telegraph—special reporter] . WELLINGTON, Monday A series of interesting speeches for and against the Government's exchange inflation policy will be heard in the House of. Representatives this week, when the principal business will be the continuation of the second reading debate on the Banks Indemnity Bill. Members on all sides of the Ifouse are anticipating with particular keenness the speech of the Hon. W. Downie Stewart, whose action in resigning from the Cabinet because of bis opposition to the exchange decision caused a first-class political sensation. Apart from the publication of the letter Mr. Stewart wrote to tire Prime Minister, Rt. Hon. G. W. I 1 orbes, when resigning office, the ex-Minister has given no explanation of the motives by which he was actuated. It is probable that Air. Stewart will bo among to-morrow s speakers, and under the circumstances it would seem to be incumbent on Mr. Forbes to reply on behalf of the Government. However, it is fairly clear that Mr. Stewart has no desire to embarrass the Government at the present critical stage, and it is expected that his protest will be voiced in a spirit of dignified moderation. It seems likely that the debate will last almost until the end of the week, for those Coalition members who intend to oppose the Government on the measure will feel bound to explain their position. As it is hoped to pass the bill without much delay, some lengthy sittings are in prospect. A division on Labour's amendment seeking to secure rejection of the bill at the second reading is unlikely to be reached before Wednesday night, and it is possible the subsequent committee stages will be protracted.

BENEFITS OF HIGH RATE

DEFENCE BY MR. POLSON CRITICISM OF OPPONENTS [HY TELEGRAPH—PRESS ASSOCIATION] STRATFORD, Monday " Anti-exchange propaganda is so intense that many believe the Government has ruined the country," said Mr. W. J. Poison, M.P. for Stratford and president of the New Zealand Farmers' Union, in a statement 011 the exchange position. "Even farmers are being persuaded that higher costs for things like wiro and roofing iron are going to absorb all they get out of the higher exchange. The facts are quite different. Figures show that every £1,000,000 of export income means £3,000,000 national income. Four to five millions added to the export income will give the same result. More spending power will result; more trade and increased turnover. That is Australia's experience. Her imports, in spite of tariffs, «ue double ours and aro increasing rapidly. Living costs have steadily fallen and are now down 26 per cent. " Next we are told wo will be taxed to pay London. It will not cost tile country any more to pay London. There will be a year before the readjustment reaches the Treasury through the taxpayer, but we collect one-fifth of the national income in taxation to-day. If we still continue the same rate on an inflated income the extra amount will be enough to pay exchange and leave something in hand. This i,s the economists' opinion. Economists heve gone as far as to say that raising the rate will have no greater effect on New Zealand securities in Britain than letting things go on as they are. Why should it? I! it helps to rehabilitate New Zealand it cannot be harmful."

.Mr. Poison charged anti-exchange propagandists with inconsistency, saying, "A short time ago when farmers wanted the exchange freo they insisted that it should remain pegged; now the farmers have it pegged they demand that it should be free. When the Government refused to interfere with the banks it was blamed for letting them run the country; now it has interfered it is attacked for not letting the banks contimie to do it. None of the propagandists offers an alternative unless it is that of letting matters take their course.'*

FARMERS' VIEWPOINTS

PRAISE FOR GOVERNMENT

[from our own correspondent] PUKEKOHE, Monday "In view of all the criticism of the Government for raising the rate of exchange, I think we should at least express our appreciation for the benefits farmers will receive from the higher rate," said the president, Mr. R. C. Clark, at a meeting last week of the executive of the Franklin Agricultural and Pastoral Society. "I believe the rate of 25 per cent will be a decided benefit to primary producers," he declared. "It has been so in Australia, and it has put the Australian dairy farmer in a much better position than the New Zealand dairyman in competing for markets. It seemed clear that without the assistance of high exchange we were in danger of being ousted from our overseas markets. Now, with £IOO tho English buyer can purchase £125 worth of New Zealand butter or £125 worth of Australian, but only £IOO worth of Danish."

"That may be so, but as a fanner 1 am definitely opposed to the principle of taking as a gift 25 per cent from other members of tho community," said Mr. J. \V. Robinson. ".High exchange is not tho way out of our difficulties."

. It. was decided to "commend the Government for its action in endeavouring to assist tho farmers by raising the rate of exchange."