NOT TO BE INCREASED

Poverty Bay Herald, Volume LIX, Issue 17944, 23 November 1932, Page 7

NOT TO BE INCREASED

BATES OF EXCHANGE

CONFIDENT PREDICTION LATEST DEVELOPMENTS (Parliamentary Reporter.) WELLINGTON, this day. In the light of developments of the last 24 hours, independent observers of the high exchange controversy are now prepared to predict with confidence that notwithstanding earlier forecasts that an alteration would be made at the end of the current week, the outcome of the agitation will be a victory for those who have opposed the manipulation of exC “tLo banks will not increase the rate after all” is the definite statement made in well-informed circles. Following hard on the widely-expressed fear that political persuasion would be applied to the Bank ,of New Zealand, these prognostications give to the situation a turn as dramatic as was the original development, and such as will invest the future with complications, and, it is said, possible repercussions. . On every occasion on which the Prune Minister has referred to the subject publicly he has insisted that responsibility for exchange rates rested with the banks, and that the matter was one entirely’outside Government or political intervention. While defending the Government’s' right to consult its directors on: the Bank of New Zealand at any time on questions of national policy, he has categorically denied suggestions than an attempt has been made to influence the directorate on the present issue. NO PRESSURE ON BANK. “The Government is not bringing pressure to, bear on the bank, he repeated last evening, when the point received incidental mention during the discussion of another subject. In the city the feeling is that the banks have already answered the Government’s statement that responsibility rests with them by declining to budge from the contention that the adoption of a bounty, scheme is the proper method of assisting the farmer in his plight. The Government, of course, is openly hostile to the bonus proposal and adheres to its refusal fo entertain it. If; as is predicted by those most intimately acquainted with the developments, the banks refuse point-blank to interfere with exchange rates, a position of stalemate will arise. What then will be the next move? This is the question that is now going the Parliamentary rounds, and in these circles it is suggested that the agrarian interests responsible for the agitation for an artificially highpegged exchange will be obliged to take stock of their position before any further plan of action is considered. It is admitted that one unfortunate result of the skirmish has been to create an open breach between the town and country interests which may have its clearest reflection on the floor of the House when the central reserve bank legislation is under consideration.