EXCHANGE AND BUTTER QUOTA

New Zealand Herald, Volume LXX, Issue 21492, 16 May 1933, Page 13

EXCHANGE AND BUTTER QUOTA

Sir, —Under this caption your correspondent Mr. K. L- Reed writes:— "Australia's rate (of exchange) conforms to her trade balance, which threatens to raise it further." This comes rather as a surprise to those who have watched and wondered at, and taken heart from, tho phenomenal financial recovery tho Commonwealth has made in tho last few years. Sir James Parr, who recently studied conditions in Australia, has publicly stated that " there can bo no question that high exchange has enabled the Australian farmers to stay on the farms and produce £90,000,000 a year in value; in short, it has saved tho country." Sir James also stressed tho fact tiiat "all New Zealand lives on our import cheque," and pertinently asks if "New Zealand farmers will go on bringing in tho cheque at a loss to themselves. If production fails, everything will go under." It is significant that anti-exchangites make no attempt to explain why a policy for which they predict such diro reactions to the Dominion lias worked such a beneficent miracle in the Commonwealth, where a deeper abyss of depression had been plumbed than New Zealand, happily, has ever known. Unfortunately, while Australia has been working out her salvation, our legislators halted between two opinion* so long that tho nnniediato benefit of the exchange adjustment was neutralised by a drop m Homo prices for butter, caused solely by o\ ersupply- What the dairy farmers position would bo to-day in tho absence of exchange restriction is not pleasant to contemplate. Let us hope that the approaching Economic Conference will deal with the real crux of the worldwide industrial deadlock, i.e., the. overwidening gulf between produceis and consumers' prices. Perhaps the producer got nwro than his fair share at one time; he gets precious little now. It may bo found easier to reduce duction than to raise uoild s prices lor or exports. Possibly something can be done m both .directions.. It .is certain that undisturbed prosperity m country liko this is impossible under any system that docs not permit of a leasoiiablo measure of remuneration for "the man on the land.