THE EXCHANGE RATE

New Zealand Herald, Volume LXXIII, Issue 22465, 8 July 1936, Page 17

THE EXCHANGE RATE

Sir, —Your sub-leader on the exchange rate in Monday's paper conveys the erroneous impression that the devaluation of the New Zealand pound by 25 per cent in 19.'13 conferred some mysterious benefit on farmers, and, therefore, before the value of the New Zealand pound can again be restored, something must be put in its place. It is difficult to understand how it would be possible for the devaluation of the New Zealand pound to benefit any citizen of New Zealand, much less the New Zealand farmer, seeing that nearly_9o per cent of the products of the New Zealand farms are valued for the purpose of exchange with the products of other countries with the New Zealand pound, and the imports from those other countries are valued for the purpose of exchange with a pound sterling. One might as well suggest that il The New Zealand farmer weighed his butter with a ton weight measuring 2ocwt., and took in exchange for his butter wire manufactured in England, and measured by a ton of 20cwt., that the benefit would be to the New Zealand farmer. There is just as much sense in tho one proposal as there is in the other. The loss on sterling exchange is 41 i per cent to the general <;onsumer, and 16} i>er cent to the farmer —no one escaped devaluation, and no one could expect to escape it seeing it was the devaluation of the unit of value that measures t]ie services of all classes of the community. Surely it is time that New Zealand should give up fooling herself into the belief that she can .improve the weather by altering the weather glass. J. Hislop.