MR COATES TALKS

Southland Times, Issue 22333, 26 May 1934, Page 6

MR COATES TALKS

NATIONAL PROBLEMS SECONDARY INDUSTRIES RATE OF EXCHANGE (Per United Press Association.) Dunedin, May 25. Some of the more important national problems perplexing the community at the present time formed the subject of an address given by the Minister of Finance, the Rt. Hon J. G. Coates, at a luncheon tendered to him to-day by the Dunedin Manufacturers’ Association. Mr Coates made only the briefest of references to the tariff question and then went on to deal with the rate of exchange, the prospect of cheaper money in the near future and the wider problem of quantitative restriction of exports, with special reference to the difficult situation that has arisen in the dairy industry.

The president of the Manufacturers’ Association (Mr James Hogg), extended a warm welcome to the Minister. He said that while they as business men did not always approve of certain Government actions they realized that prompt and difficult decisions had to be made by those in power and it had been their policy as manufacturers to support the Government in the difficult tasks it was called upon to face at the present time. He recalled that speaking as the Prime Minister at the New Zealand and South Seas Exhibition Mr Coates had quoted figures to show the increase in the production of the secondary industries of £15,000,000 over a period of 18 years from 1906 to 1924 and an increase of employees for the same period of 28,000. In presenting these figures he had stated “our manufacturing industries are increasing in importance and are becoming an appreciable force in the economic Jife of our people and are steadily developing hand in hand with the growth of our great primary production.” Manufacturers believe, Mr Hogg added, that if they interpreted the Minister’s recent public utterances correctly he still advocated the development of secondary industries on sound lines as a means of progress for the Dominion. The Minister said he found it difficult to talk to manufacturers at the present time. They all knew that as the result of the Ottawa Conference a Tariff Commission had been set up in terms of the undertaking given to the United Kingdom at that gathering. Actually it was time something of the sort was done, as it was some four years since any move in this direction had been made, but while he admitted that a definite undertaking to investigate tariff matters generally had been given. New Zealand was in no way committed by that undertaking. It was true that the Dominion had agreed that there should be an investigation into its tariffs and he thought that it was to New Zealand’s advantage that such an inquiry should be carried out. If there had been any delay in setting up of the commission it had been due to reasons over which the Government had had no control. Actually manufacturers in the United Kingdom had been responsible for the delay. Referring to the exchange rate Mr Coates said: “We now come to the question whether the Government was right in increasing the rate of exchange. It was not possible to bring down wages and costs below the existing level and the Government came to the necessity of increasing the currency.” Mr Coates strongly denied that the Government in increasing the rate of exchange had caused a diversion of trade from Great Britain to Australia. Australia had depreciated her currency first, and that had had the effect of reducing the imports from the United Kingdom and assisting internal conditions. It was natural that New Zealand should purchase from Australia if she was quoted a cheaper price but any diversion that occurred had taken place before the rate of exchange had been raised in New Zealand.