EXCHANGE.

Southland Times, Issue 21647, 8 March 1932, Page 5

EXCHANGE.

To the Editor.

Sir, —In your issue of March 2 you publish an address delivered by Mr David Dickie before the Waikaka branch of the Farmers' Union on the subject of exchange. An address on such a subject by a man of such standing in the farming interests is too important to be lightly passed over, and as I must confess that I am still rather ignorant on certain points I would take it as a favour if you or some of your readers would kindly explain, as I am sure that it is a subject little understood by the rank and file of farmers. At one time I had the idea that it was simply the charge made by the banks for their services in the exchange between buyer and seller. I now find that this is not so, but I confess that I am still at a loss to understand how it benefits me as a farmer. For instance who is the exporter? I sell my wool through the local market, the buyer may be from England, France, Germany, America or even from Japan. The buyer then paying all charges of transport to his own country, I should say becomes the exporter. He pays my agent for the wool. My agent sends me account sales showing the price for which it was sold, less charges for commission, handling etc., and so far as I am concerned, that is the end of it. Does my agentget the 10 per cent, or does the party who pays the shipping get it? It has never come to me. Those producers who consign to the British market may get it, but they are comparatively few. Even in the matter of our dairy produce, comparatively few factories consign, most selling to the agent of some British speculator. I should like therefore to know who gets the exchange ? According to the illustration given in Mr Dickie’s address, the importer pays the exporter for the accommodation but from what fund? In most cases I should say from his banker, for which he pays interest. As a business man he must then add that 10 per cent, to the price of his imports, with, of course, a little extra by way of recompense for advancing the exchange. This is then passed on to the consumer, and in normal times, if it is for food or clothing, it is charged to cost of living, or, if tools or machinery, to cost of production, and is passed on in higher charges from one tc another, till at last it reaches a dead end, and cannot be passed on any further. The dead end is the primary producer, who must simply take what the overseas speculators may give him. I would, therefore, say that ..the higher the import exchange the worse for the primary producer for it is he who must pay it in the end, as all others can pass it on at least in normal times. What is the matter with our secondary industries? Why don’t they help? Why don’t they export their manufactured goods? I doubt if there is one of our secondary industries which is earning its own living. They are all calling for tariffs, and more tariffs, and what are protection - tariffs but charitable aid, otherwise the dole? What, especially. is wrong with our woollen industry? No need to go to the other end of the world to buy their raw material, pay transport both ways, plenty of good coal to give power. Please tell them, Mr Editor, to rouse up and help.—l am, etc., J. McL.