RATE OF EXCHANGE

Poverty Bay Herald, Volume LIX, Issue 17950, 30 November 1932, Page 2

RATE OF EXCHANGE

(To tho Editor of tho Herald.) Sir—ln your Monday’s issue 1 have just mid another of your very convincing articles opposing any aibituuy terference with the rate o exd ungIn this opposition practically ail city organisations, Chambers of Commerce etc as well as most of the banking authorities, are with you, but you have all forgotten one trifling detail foigiv ipe for mentioning it--you have forgoten to tell us your own remedy ioi out troubles. You tell us to keep smilin«, to keep a stiff upper lip; to meet on difficulties in a spirit of gay optimism, to produce more; to eat less; to mcieasc efficiency j to reduce costs; you remm i us that every cloud has a silver lining and that it is a long lane that has no turning. But proverbs and platitudes will not help us to avoid default and all the time we feel that a raised exchange rate will. Meantime, suppose you sell your paper at Id per copy and cut your advertisement rates m nan, and soe bow you like it. Try also to imagine that your machinery and all VQur little bits of type have stomachs and months to be filled. You have warned us against any interference with the law of supply and demand in respect of exchange, but why this sudden fear of interference? __ln almost- every direction in this country outside the realm of primary production, there is interference with supply and demand—tariffs, quotas, embargoes, bounties, trade unions. Do you condemn t]\em all? ‘ Or can it bo that a high exchange rate would interfere with the process that is now going on so satisfactorily—the process of steadily transferring* the whole of the possessions of the man on the land to his city creditors. The farmer’s gross income is cut tn half and he has no net income whatever; lie is in. a state of economic slavery from which, short of another boom, he can never emerge, but meantime he can continue to supply the Dominion with the best food supply in the world at half the cost of produc.tioh,

You will certainly agree that our difficulties are primarily due to the dislocation of tho balance between the primary producers and the non-primary producers, brought about by the catastrophic fall in export values. Now here are two manifest impossibilities; one is for us farmers to influence in any degree the overseas values of our products, and the other is for us to reduce our costs of production in anything like the degree necessary to restore the balance. We suggest that the raising of the exchange rate will partially restore the balance. Certainly this measure, in common with any form of currency inflation, is artificial, but so is compulsory reduction of interest and rent; so is the mortgagors’ relief legislation ; tho bolstering up of the Public Trust; remissions of rent and interest to Crown tenants, and many other measures that have been deemed absolutely essential to avert a. crash. The one* interference which you condemn would be infinitely less mischievous and infinitely more efficient than the sum total of all these minor interferences. The wisest race in the world in financial matters adopted a somewhat similar method when England went efr the gold standard and saved herself from chaos.

But. without doubt you have a better alternative to suggest.* Do not keep rs in suspense any longer, but show us the way out.—l am, etc., Opulent farmer.