EXCHANGE RATES.

Taranaki Daily News, 20 September 1924, Page 8

EXCHANGE RATES.

A SERIOUS PROBLEM. ; AUSTRALIA AND NEW ZEALAND. SIR JOSEPH WARD’S VIEWS. Sir Joseph Ward, who lias been on a visit to Australia, interviewed by a Wellington Post representative, and asked his impressions of conditions in Australia, said: —“There can be no question that Australia is a wonderful country. Its resourced from, the point of view of wealth-producing are almost illimitable. Take this season as a case in point, it is expected that the value of wool for sale will be easily 50 millions sterling, and the wheat harvest is a remarkably fine one. The lowest values that I heard put upon it fan up to 30 millions; and, .in addition to that, the wine products of South Australia are said to be greater than has been the case for many years—-if indeed it has been equalled in the past. So that from the point of view of real wealth, the ordinary products of the soil in the three articles referred to gives a basis to Australia that makes any temporary difficulties —and there are some existing at the present moment —only a matter of a short time for the disappearance of the casual troubles that have presented themselves. INSUFFICIENT NOTE CURRENCY.

“These troubles,” stated Sir Joseph, “are affected chiefly by the insufficiency of the note currency, which is felt very severely in parts of Australia, and, indeed, it is felt to a more or less extent throughout that great continent. The providing of 80 millions sterling alone for wool and wheat, obviously requires a largely increased note issue. Apart from those two factors, the increase in the population, and the increase in the money required for the larger business that the country is doing, upon the present maximum amount of notes available for currency purposes, has made money very tight. At the present moment, the note issue is controlled by a board of important and experienced men. Representations had been mode to them by large financial institutions of Australia to increase the note issue with a view to removing the daily money shortage. There is a natural desire on the part of the authorities who control the note issue to prevent a possible inflation of values, which in the long l run, of course, would be detrimental to the country, and the board decided to increase the issue of five millions sterling, at the rate of 7 per cent., and when I left last Thursday that was the position. HIGH RATES OF EXCHANGE. “It seems almost impossible for banks to agree to pay 7 per cent, for the increased note issue, and to continue to tend money to their clients at a lower rate; and I understand that the difficulties that a shortage of currency had created still more or less continue, and apparently is likely to do so for some time. When one comes down to bedrock, the whole temporary position is due to the high rates of exchange between London and Australia and New Zealand. To get back the balance available as between the value of exports and imports to Australia at the present high rates of exchange is certainly a terrific handicap, and accentuates the difficulty of meeting the increased note currency. There can be no doubt that the finance for both wool and wheat can. and will, be provided for in Australia. and without difficulty. AN ANOMALOUS POSITION. “The position of a country being full of wealth, so to speak, and the limitation of currency making it difficult for people in business, seems an anomaly, but the fact remains all the same. No one of any experience can have the least doubt about the future of Australia, and though fluctuations in important matters in the daily lives of people will from time to time take place, there does not appear to me to be any serious prospect of that great country being able to overcome any of the causes that have arisen from time to time, since the war period particularlv. THE CITIES AS MAGNETS. “One of the real problems that Australia has to face is the over-population of the cities, particularly Sydney and Melbourne, both of which are acting as powerful magnets, due to the comfort conveniences and the life that is to be found in the large centres. One hears public men of experience, as well as commercial mon, resident in both cities, deplore the position, but the problem is how to solve it. The answer obviously would be by making the land in Die interior attractive, and increasing tend settlement; but that is not by any means capable of attainment at any great speed compared with the incessent inflow of people already in the country to the cities. SYDNEY’S PROGRESS. “I mot a number of public men dnrig my visit, including the Prime Minister of the Commonwealth, Mr. Bruce, and the Premier of Now South Wales, Sir George Fuller, and found them in good heart, and, as expected, actively engaged in connection with the important questions that have arisen, and are arising, in different parts of Australia. I saw a great advance in Sydney and Melbourne since my last visit, about four and a half years ago. The buildings that have been erected in both cities, by the pulling down of old ones and the utilisation of new sites, strikes one immediately, particularly so in Sydney. What makes it more interest ing to see such a development is the fact that, like other parts of the world, the cost of erecting buildings has increased greatly. I had intended to visit both Queensland and South Australia. but found it necessary to return here in the meantime, but I expect to visit them both before very dong.”