BUTTER QUOTAS

New Zealand Herald, Volume LXX, Issue 21554, 27 July 1933, Page 13

BUTTER QUOTAS

Sir, —Several correspondents deplore the quota proposal, but what else can Britain do? "Wo have placed an obstacle on her exports by a false measure ef currency. How utterly foolish was the McLeod-Coatcs move is more forcibly demonstrated each day. With a trade balance in our favour of 3J millions for the past twelve months after meeting all obligations, wo should be at par with sterling. We could have had the 10 per cent exchange rate without cost to tho country, but chose to pay tho banks for 25 per cent. And to what end? Not to maintain production, which have taken care of itself, but because, on Mr. Forbes' statement, farmers were slipping in their mortgage payments. That is, then, that land values must be maintained though every man, woman and child in the towns be made to pay for it. To protect, in fact, whoever, at the end of a hectic gamble, is left, in the elegant American phrase, "to hold tho baby." E. L. llekd. Sir, —I am not a believer in quotas in ordinary times, but at the present moment it appears necessary for Britain to do something to prevent tho collapse of world prices. But, leaving Britain's position out of the question, will a butter quota be so disastrous for New Zealand as it at first appears? Supposing, with the butter quota in operation, New Zealand has to reduce her exports of butter to Britain by 10 per cent, this will mean that every butter factory will have to reduce its output by 10 per cent, and, further, every dairy farmer will presumably have to reduce by the like amount. Now supposing, with tho quota in force, the prices rise to off sot this reduction of 10 per cent (the object of the quota system being to raise prices), will tho farmer be any the worse off? Granted he will not be able to expand, but how many industries have been able to in recent years? As regards the unemployment question, it will bo neither better nor worse off. With the present ruling prices, the farmer has been forced to keep his labour costs as lowas possible, and with tho quota he will not be able to increase, and take on more labour, so it will really bo a standstill period, hoping for better times with world recovery. Tauranga. D. Knowles.