THROUGH THE CRISIS.

Pahiatua Herald, Volume XLI, Issue 12437, 1 September 1933, Page 5

THROUGH THE CRISIS.

HIGH EXCHANGE DEFENDED. MR. RANSOM’S ADDRESS. Electric Telegraph—Press Association CHRISTCHURCH, August 31. The Hon. E. A. Ransom, Minister of Lands, to-night entered the _ campaign in the by-election for the Lyttelton seat by delivering a speech in supp’ort of the Coalition Government candidate. He spoke in the Lyttelton Labour stronghold, but was given an excellent hearing. The crowd was good-humoured, and those members of it who did interject occasionally found, the Minister rather more than their match. At the conclusion of the meeting a vote of thanks to Mr Ransom was carried wit h acclamation. Mr Ransom discussed the causes of the country’s financial difficulties and the measures taken by the Government to meet the situation. The immediate cause of the country’s financial ills was the loss of national income through the decline in the prices of primary produce. Taking 1928 prices as a basis, the loss up-to. the end of 1932 was £67,200,000, made up as follows: 1929, £2,300,000; 1930, £13,700,000; 1931, £24,000,000* 1932, £27,200,000, but notwithstanding the fall in prices t-he value of our exports is beginning to improve as a result of increased production. During the year ended June, T 933, butter prices declined 13 per cent., cheese 11 per cent., lamb 0 per cent., mutton 5 per cent., but the value of exports increased by £2,800,000. By this increased production the restoration of prosperity was assured as soon as prices recovered. The prospects of the wool industry were also very bright. There had been an important rise in prices, and stocks were much lower than lor some time. The depression developed in 1929-30, and since then Government economies and adjustments had been: 1930, £260,000 • 1931, £1,360,000; 1932, £4,320,000 • 1933, £3,550,000; total, £9,490,000. CHEAP MONEY. As cheap money was regarded by all economists as the essential element toward recovery, the Government had set out on a campaign to bring down all interest rates, said Mr Ransom. Reductions m interest on public debt had secured a net gam to the budget of £570,000. Interest on mortgages and rents under leases had been reduced 20 per cent., with a minimum rate of 5 per cent. By arrangement with the banks the overdraft rates had been reduced from 7 per cent, to 5 per cent. The exchange rate had been raised from 10 per cent., fixed by the banks, to 25 per cent., at the instigation of the Government, continued Mr Ransom. The Dominion, as a primary producing country, was in a very serious position during the closing months of the last financial year, and some action was necessary to prevent disorganisation and disruption of the primary industries. The Government took counsel with three of the Dominion’s ablest economists, whose advice was that the raising of the exchange rate was ihe_ only safe course to follow. Tlie Prime Minister held the opinion that exchange was a matter ior the banks. Mr Forbes was not a man to change his attitude readily, but after examining the position from all angles he agreed with Gabinet that a rise in the exchange rate was the right course in the circumstances. Tlie value of the higher exchange policy to the primary producer for the past seven months was £3,200,000 on a 15 per cent, basis and £5,280,000 on a 25 per cent, basis.

The Labour Party’s declared policy of guaranteed prices would involve making provision for £20,000,000 annually until prices recovered, said Mr Ransom. This approximated the cost of the Great War. Contrary to arguments of opponents of high exchange, the cost of living had not increased since the exchange was raised, The actual decrease in the cost of living was 11 per cent. LABOUR AND THE COALITION. Mr Ransom declared that Mr E. J- Howard’s statement that the Labour Party was never invited to join the Coalition Party was mere juggling with words. The Labour 1 arty was invited by the Prime Minister, through their leader and other representatives of the United Party Committee to join a. National Government. After long and numerous sittings of the committee no progress was made, and the Prime Minister announced that he had deluded either to form a National Government from all parties in the House or to dissolve Parliament and appeal to the country. Mr Holland informed the Prime Minister that hfs party would not join the National Government. Mr Coates asked for time to consider the question, and after three days announced that he was willing to join a National Government during tlie period of the country’s crisis. Mr Holland again said Ins party was unwilling to join. As it was impossible to form a National Government of all parties negotiations were entered into by the United and Reform Parties to form a Coalition Government. ADDRESS BY INDEPENDENT. LABOUR PARTY BOYCOTT. CHRISTCHURCH, August 31. Mr E. _L. Hills, Independent Labour candidate for Lyttelton, address-