THE EXCHANGE QUESTION

Otago Daily Times, Issue 21580, 27 February 1932, Page 18

THE EXCHANGE QUESTION

TO THE EDITOR. Sir, —This exchange question is an-in-triguing one. But the “spellbinders” of the Fanners’ Union see only one side of it, and that through distorted glasses. Their idea seems to be that the producers could get hold of several millions (they are indefinite on the point) for nothing. A few years ago some of them had similar ideas regarding the holding up of the British wholesalers and retailers regarding the price of butter and cheese. It was loudly announced that the producers in this country were losing millions (I forget how many) because they did not have the wit arbitrarily to control the prices at which their output should sell on the Home market. _ It is unnecessary to recall in detail the fiasco that followed, and how the then Premier (Mr Coates) had to make a hurried trip Home to try and save the situation. In the end the New Zealand producers lost a clear million pounds sterling. They had found it easy to force up the price of their products in New Zealand (a land of rings and combines), but it was different in Britain, which is open to the trade of the world. Now it is a case of buying and selling money in London, and Messrs Waite and Co. think they can skyrocket the exchange rate to the benefit of the New Zealand farmer. At present New Zealand is labouring against an adverse exchange rate, inasmuch ns to purchase £IOO worth of goods in England requires £llO in New Zealand money. The farmers’ advocates would like to see this adverse rate boosted to £l3O. But if that happened who is to say that the process might not go ou until our currency became absolutely worthless? Inflation is a horse very hard to control, as these farmers would find out. Uncontrolled exchange would mean ,an era of frenzied gambling on exchange rates, with disastrous consequences all round, apart from the fact that any inflation would mean famine prices for all goods imported, and a direct loss of millions of pounds to the Government and local bodies who have borrowed in London. It is truly surprising to see a writer like Mr W. D. Mason taking the narrow, sectional view. I should have imagined his thought, as that of an old Clarion man, would always have been for the “greatest good to the greatest number.” —I am, etc., Patriotic Pakeha.