OPPONENTS’ CASE

Poverty Bay Herald, Volume LIX, Issue 17946, 25 November 1932, Page 5

OPPONENTS’ CASE

TEXT OF MEMORIAL DANGERS OF AN INCREASE EARLY STATEMENT ADVOCATED (Parliamentary Reporter.) WELLINGTON, this day. The full text of the memorial presented to the Et. Hon. G. W. Fonbes and the Hon. W. Downie Stewart by opponents of an artificially high rate of exchange is as follows—“Wo, the undersigned members of tlie House of Representatives, on •behalf of some 20 odd members who have expressed general agreement with this memorial, wish to express our emphatic protest against a suggestion made to the Government that it should use its influence with the banks to increase the rate of exchange to an artificially high level against New Zealand. We contend that if such action is taken by the Government it will fail in its objective of providing any effective measure of relief to exporters, and will cause far-reaching and evil results to all other sections of the community. /‘ln support of these contentions we respectfully submit the following reasons: FIVE COGENT REASONS “(1) It is in the public interest that exchange should find its natural level 011 the basis of the Dominion’s trade balance and the law of supply and demand —in short, that there should be free exchange apart from political interference. “(2) An increase in the exchange rate to say 30 per cent, would, in effect, be equal to an additional customs tax oil all imports by roughly 20 per cent., but not one penny of additional revenue would accrue to the Dominion. “(3) Imports would substantially decrease, with a consequential reduction in customs revenue. This loss would have to be made good by other forms of taxation. “(4) Trade and commerce would be further restricted, the internal prices of goods would be raised, the cost of living increased, real wages, expressed in terms of purchasing power, would bo decreased, and, as a result, there would be lessened business and the unemployment problem would be intensified. “(d) The spirit and letter of the Ottawa agreement would be violated, and the present good understanding between the Dominion and the Mother Country would be endangered, possibly to the detriment, of our exporting farmers who enjoy valuable preferential privileges in the British market. FAVORABLE TRADE BALANCE “A major feature of our objections lies in fact that (a) the rise in exchange as proposed would, of necessity, further seriously embarrass the finances of the Government and additional heavy taxation would have to be imposed upon our people, who arc now at the limit of their resources with regard to taxation; ami (b) local bodies in many cases where their obligations are oversea would have to impose additional rates to make up exchange losses, or, as an alternative, dismiss workers or reduce wages. “lit conclusion, we desire to call your attention to the Dominion’s favorable trade balance of £12,000,000 on the past 10 months’ trading, with the major part of the export season yet to come Additional reasons as affecting the credit of the Dominion and the welfare of our, people might bo advanced against exchange inflation, but, fin filly, we would stress the necessity for an early and definite statement bv the Government to allay the uncertainty and anxiety that have been aroused throughout the country.” The statement is signed by Messrs. Stallworthy, 11. Harris, R. A. Wright, W. A. Vcitch, 11. Atmore, H. Holland, W. A. Bodkin, 11. M. Rushworth, and C. A. Wilkinson.