The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. FRIDAY JULY 29, 1932. TWO-WAY BUSINESS

Southland Times, Issue 21772, 29 July 1932, Page 4

The Southland Times. PUBLISHED EVERY MORNING. Luceo Non Uro. FRIDAY JULY 29, 1932. TWO-WAY BUSINESS

Enormous crowds go to Epsom Downs for the English Derby, and they are drawn from all classes of the community. Above these hundreds of thousands, we are told, there moved a kite bearing the words “Eat New Zealand Apples.” There is nothing new in this, of course, but it is a reminder of the pertinacity of the campaign in the Old Country to keep before the people, the consumers, the existence of New Zealand products. In the operations of the Meat Board, the Dairy Board and of that other great publicity agency, the Empire Marketing Board, advertising plays a big part, and every producer in this Dominion is reaping the benefits accruing from these operations. British people are reminded constantly that those who produce foodstuffs in the dominions are buyers of goods manufactured in Britain, and herein lies the essence of Imperial trading. But it is ineffectual, it is unreal, if New Zealanders in their part are not recognising every day that the people who send manufactures from Britain to this country are purchasers of New Zealand’s products. . It may appear unnecessary to recite this

fact, but unfortunately it is too often forgotten, and too many people forget that all trade activities are two-way, that we buy because we sell, that we sell because we buy, and that where we deliberately depreciate our pound in order to reap a temporary advantage, we are seizing that advantage at the expense of those who buy our goods. That is one of the important facts in connection with this exchange controversy which too many overlook. In Australia the exchange rose because it had to. It is much higher’ than our own rate of exchange, but it has not been raised artificially. Australia’s high rate was a consequence of her financial troubles, which are worse than our own because she had heavy loans maturing, a difficulty which we, fortunately, escaped. Australia’s rate of exchange has receded from its highest point, and in the Commonwealth there are people who would push it up again to secure a premium for a section of the community, just as there are people in New Zealand who demand that the present level, which according to the trade figures, is at a point set by the economic situation, should be raised as high as Australia’s. There is a vast difference between a rate of exchange artificially raised, and one that has gone up by a natural process. Australia’s case is the product of misfortune; for New Zealand to take the same course deliberately would not be honest, and one of the immediate results would be a weakening of our credit. New Zealand to-day has an advantage over Australia, and when the time comes for the renewal of loans, as it must come, the strength of our position today will be a great assistance to us. But if by deliberate action we depreciate our currency and seek an advantage at the expense of those who buy our goods, we cannot hope to inspire the confidence that Australia does. Preference to British goods is not only a matter of sentiment. It is a matter of commonsense and business acumen, because the Old Country is our chief market, and in these times is absorbing larger quantities of New Zealand goods than she did before the war. An examination of the trade figures will show an astounding increase in oui’ exports to the Motherlandi and we must remember that it is through those exports that we pay our way. This country’s troubles would disappear immediately if prices in the Old Land could rise to the previous boom levels; they cannot be dissolved by schemes which depreciate our currency. Those who talk glibly of inflation invariably ask if nothing it to be done. Something is being done. Production costs are being lowered, and this country is realizing that a standard of living too high to be sustained by its earning power cannot be sustained on paper. The citation of America’s efforts is dangerous, because it is misleading. If large quantities of gold were unearthed in New Zealand, the country would benefit, because that gold would improve our position abroad, bringing additional income to New Zealand. In the United States the release of the surplus gold held in reserves and frozen, is like a gold discovery, and the issue of credits to give action to that gold is vastly different from an issue of tickets to give us more paper money, through which prices will rise without any real benefit coming to us from our exports. To denounce inflation is not to put sympathy to one side. As a matter of fact, the inflationary process does not work to the advantage of the poor people. We have referred to the Guernsey scheme, not to scoff at it, but to scoff at those people who think that the Market Hall was built without interest being paid. It was a short term loan, and, as the economists, even those who condemn the money lenders and the Capitalist system agree, it was paid for by the poor people of the island. Objections to artificially raised exchange rates and to inflation are based on the belief that they are too costly and that they do not secure the real benefits those who advocate them think will come from them.