HIGH EXCHANGE RATE

Otago Daily Times, Issue 22367, 14 September 1934, Page 10

HIGH EXCHANGE RATE

DEFENDED BY MINISTER REPLY TO MR DOWNIE STEWART (Fkom Our Parliamentary Reporter) WELLINGTON, September 13. The criticism of the Government’s exchange policy by Mr W. Downie Stewart was replied” to by the Minister of Finance, Mr Coates, in his speech concluding the Financial Debate in the House of Representatives to-day. Mr Coates said that Mr Stewart had spoken of a natural rate of exchange, but he appeared to forget that there was no such thing as a natural rate between New Zealand and England. The banks had always fixed the rate in the past. The Minister referred to Mr Stewart’s statement that, while the Government had focussed its attention on a bonus to farmers, it might be that the latter had lost more than they had gained if account were taken of the ill-will and irritation that had been caused. “If the farmers cannot see the benefit they got out of the exchange, then all I can say is, ‘God help them,’” said Mr Coates. Continuing, the Minister said it had been clearly shown that the raising of the exchange had not produced a fall in imports, nor had it diminished New Zealand’s ability to purchase goods from overseas. The imports were moving up aud were continuing to move up on last year. Mr Stewart: It stopped them from rising. Mr Coates added that it was well known that the fall in imports came with the fall in prices and not with the increased exchange.