DEPRECIATED CURRENCY

Poverty Bay Herald, Volume LX, Issue 18193, 14 September 1933, Page 7

DEPRECIATED CURRENCY

DELETERIOUS TO N.Z. TRADE MR, DOWNIE STEWART’S VIEWS VANCOUVER, Aug. 12. Depreciated currencies should be avoided, in the opinion of Mr W. Downie Stewart, former Finance Minister of New Zealand, who is en Toute to Banff to attend the conference there. “Depreciation of currency in our own country has had unfortunate results,’’ he said. “It must be remembered that when the Australian currency depreciated it was a natural reflection of trade conditions. On the other hand, New Zealand depreciated her currency deliberately. What ivas the result? Denmark, a competitor in the British market, followed suit. France retaliated with increased tariffs and, while it is perhaps difficult to establish that the depreciation of our currency lowered prices in the London market, it certainly increased exports to an extent of creating over-supply, thus indirectly reducing prices. “Whether or not it is a fact, British farmers 'believe that New Zealand and Australia are able to compete unfairly in their market and have been making a very determined effort to have a quota established for their 'protection,’’ Mr Stewart said.

“But the main objection to depreciated currency is that it creates an extra burden on the Budget. I always believed that when a country depreciated its own currency it would balance its Budget. That appears to be impossible with the extra burden it imposes—the cost of remitting money, the extra burden on foreignoivned loans and the consequent loss in customs revenue. However, the matter is still being violently debated in New Zealand.”