DECISION EXPECTED

Poverty Bay Herald, Volume LIX, Issue 17947, 26 November 1932, Page 5

DECISION EXPECTED

RECEPTION IN THE HOUSE NEXT MOVE AWAITED POLITICAL REPERCUSSIONS (Parliamentary Reporter.) WELLINGTON, this day. There was nothing dramatic about the reception in Parliament House last night of the decision of tho Bank of New Zealand that the exchange rate would not be altered. The reason was that most of the members had left for their usual week-end in the constituencies by the time the news became general. At least one Cabinet Minister had not been acquainted with the official communication from Sir Henry Buckleton, but no doubt those members of the Ministry who constituted a theatre party last evening received the Prime Minister’s verbal advice of the result. Reports are current that the decision of the board of the bank was reached by a five to one majority, but this has no official confirmation, as it is never tho policy of the banks to indicate whether or not there has been a division of opinion on the directorate. There are six directors of the bank, four of whom, Sir George Elliot, Sir Harold Beauchamp, Mr. William Nicholson, and Mr. R. A. Anderson, are the Government’s nominees. What effect the bank’s fiat refusal to tolerate political interference with exchange rates will have will become an issue"' of paramount importance next week, when the contending parties in the House will have an opportunity of considering the possible action that the Cabinet will take. The banks have made an alternative offer to the Government on lines differing materially from their previous suggestion of a bonus system, and it is for the Cabinet to adopt or reject that proposition. A CRISIS POSSIBLE It can be taken for granted that those who have been pressing for an artificially high exchange will defer any further action until tho bank’s latest proposal is disposed of by the Cabinet. Their main concern has been tho prompt granting of assistance to the exporting pastoralist, and if the Government promotes emergency measures to assist that section of the community it would appear that the situation will he covered for the present, at all events. Should the £2,000.000 loan scheme, as tho bank’s proposal already has been termed in official circles, be rejected, a crisis, perhaps greater than that precipitated by the original agitation, may he looked for. So determined is the extreme >branch of the farming section of the House, that even the possible downfall of the Government would not act as a barrier to the attainment of their objective. It was realised on Wednesdaly last that the agrarian group had lost the battle, and that the Bank of New Zealand would, at its meeting yesterday, reject the idea of high exchange. “We knew we would not gel it,” was the calm admission made last night by a Canterbury member who was one of the strongest- supporters of the movement. Without pretending to know what the next move would be, lie declined to discuss possible repercussions, and intimated that no meeting had yet been held. DELAYING DISCUSS 1 ON In anticipation of the subject Vicing opened up unexpectedly in the House, several members have already prepared their speeches, as they anticipate that an opportunity will arise to record their views before the Motiioka by-election on December 1. On the other hand, it seems evident that the Government does not wish the subject to be discussed next week.

The Labor Party is still playing a waiting game, but 'it may spring a surprise when the next Imprest Supply Bill appears. It will he the aim of the official Opposition in any move taken to embarrass the exchange inflationists, because they constitute a majority in the Coalition,'and have been responsible for the flutter in the political dovecote. So far no request has been received for a caucus of the Coalition Party to discuss the formulation of a policy acceptable to all sections of the party, and which will give immediate relief to farmers. Those with an intimate knowledge of banking policy have, throughout the controversy, taken it for granted that the issue did not concern the Associated Banks, but was purely a matter for determination by the Governmentcontrolled institution to whom the representations had been made. It is accepted also that what the Bank of New Zealand did would he a lead to the other trading banks. Had the matter been one for decision by the Associated Banks, last night’s announcement would have come from the chairman. Mr. J. L Grose, instead of from Sir Henry Buckleton.' Although a meeting of the Associated Banks was held yesterday, it was ascertained that it had no hearing on the exchange question.