HIGH EXCHANGE

New Zealand Herald, Volume LXX, Issue 21546, 18 July 1933, Page 13

HIGH EXCHANGE

Sir, —It is evident that Mr. Marsden Cowan has very little knowledge of merchandising or trading and is guided only by comparison of prices preexchange and those of to-day when he says that "every farmer knows that since the raising of the rate there has been nothing like a 15 per cent increase in the cost'of his purchases." My letter dealt with the imported articles the farmer uses and consumes, and it may enlighten your correspondent and others to learn that, speaking generally, thero has been a considerable drop in wholesale prices overseas. Instances have come under my notice of goods landing from the United Kingdom (with exchange included) at cost identical with the pre-exchange period, and the large importations from Japan have also affected prices considerably. Comparisons cannot be made in general terms. The solid facts remain in that there is passed on to the consumer the additional exchange, plus the overhead costs of the trader. Would Mr. Cowan be surprised to find that through the exchange inflation Mr. Coates' Government gets li per cent on every imported article he purchases? If he calculates 5 per cent sales tax on the 25 per cent exchange contained in the price tff his purchases he will find this is correct, and other overhead costs apply in the same way. It would seem that many producers are only impressed with the increased receipts; never mind the cost to the community or themselves. In respect to Mr. Cowan's reference to the farmer's higher price, we are all anxious to see a legitimate rise in the farmer's prices, but not an artificial one by taking the money out of the pockets of one section of the community and putting it into the farmers, less what is lost in the transition. Hu<;h G. Thomson, Chairman, Auckland Importers' Association.