OUR EXCHANGE POLICY AND THE EXPORTING FARMER

Otago Daily Times, Issue 21543, 15 January 1932, Page 8

OUR EXCHANGE POLICY AND THE EXPORTING FARMER

TO THE EDITOR. Sir, —Since I wrote you on January 6 respecting our exchange policy I see that some northern organisations have taken the matter up. A Press Association telegram from Auckland says that the North Auckland Dairy Companies’ Association has written to the Prime Minister stating that under the free operation of supply and demand exchange rates would rise a further 15 or 20 per cent. This means, in effect, that if to-day the exporter gets £IOB 10s credited him for the sale of £IOO worth of wool, butter, or rabbitekins, then if exchange was allowed to swing up naturally the exporter would be credited with anything from £123 10s to £l2B 10s. If that is so, why should not the exporter get the full value of the credits he establishes in London. ihe Australian exporter of lamb and butter to-day gets £125 credited him for £IOO worth, while the New Zealand exporter gets only £IOB 10g for £IOO worth. The exporter has to accept the working of the law of supply and defiiand as far as ms produce sold overseas is concerned. Why, then, should he be defrauded of the real value of the credits he establishes m Our unemployment problem will not be cured by either relief depots or by extra wage taxes; these are expedients. Unless our exporting farmers can stay on the land producing for export, then our unemployment will continue. , r . I armers cannot employ labour to-day, and cannot buy commodities needed for development, because of the following situation, the year 1914 being taken as a base hne:—(,l) The cost of living is 42 per cent, above 1914; (2) wages for the principal industrial groups are 47 per cent above 1914; (3) farming costs are 57 per cent, above 1914; (4) export prices are 10 per cent, below 1914; (5) British wholesale prices are 0.7 per cent, below 1914. Whim everything the farmer has to buy is 5/ per cent, above 1914, and everything he has to export is 10 per cent, below 1914, it will be seen that the farmers pound is depreciated in purchasing power. V\ e must try to get export prices up and all New Zealand costs down. One way of getting export prices up is to let tfie exchange swing up. At present, in the interests of all importers (and the -Treasury is included in this category), the exporters are penalised. > . . , A Give the exporters a fair chance, and New Zealand will recover. Refuse them a fair chance, and farmers will cease producing. Then the cities will have more unemployed than they have January 13.