THE EXCHANGE RATE

New Zealand Herald, Volume LXXII, Issue 22193, 21 August 1935, Page 14

THE EXCHANGE RATE

PLEA FOR REDUCTION MR. GOODFELLOWS VIEWS Serious consideration of a reduction in the exchange rate was urged by Mr. William Goodfellow, managing director of Amalgamated Dairies, Limited, in an interview yesterday. The prosent level of exchange would probably bo defended in argument during the coming election campaign, said Mr. Goodfellow. He therefore wished to point out that there was a possibility of terious repercussions. The benefits of high exchange to the farmer were rapidly disappearing as internal costs rose. A reduction in the rate should be seriously considered, with a view to lessening unemployment and increasing trade with the United Kingdom. New Zealand had a wonderful opportunity to lead the Empire by making a concrete offer to the United Kingdom of a reciprocal trade treaty, which would be of the greatest value to both countries.

The present free market for New Zealand dairy produce in Britain was not likely to last long, as the agreement with Denmark would expire next April, and it was the reiterated policy of the United Kingdom Government to impose duties on all imported dairy produce, although with preference to Empire countries. Every effort should be made without delay by New Zealand to escape this, for a duty on butter and cheese, and even more on milk by-products, would be a very serious matter to the Dominion. It could not be denied that a largo part of the Briiish commercial community felt that New Zealand had not played the game by raising the exchange without an adequate reduction in import duties. The high exchange policy, which had been adopted soon after by Denmark, had undoubtedly had a depressive effect on London dairy produce prices, so it was doubtful if the New Zealand producer had really obtained any considerable financial benefit from the high exchange rate.