PROBLEM OF EXCHANGE.

Taranaki Daily News, 21 November 1924, Page 7

PROBLEM OF EXCHANGE.

NEED TO STOP BORROWING. REDUCING INVISIBLE EXPORTS. By Telegraph—Press Association. Wanganui, Last Night. A paper on the exchange rates operating between London and Now Zealand was read at. the Chambers of Commerce conference to-day by Mr. J. T. Martin (Wellington), the main features being a consideration of the various factors influencing the rate movements, including the importation and exportation of goods, Government and public bodies borrowing, and investments in bills. Reference was made to the increasing value of our exports accentuating rather than relieving the high rate of exchange, and the necessity of the Government and public bodies to reduce the invisible exports by refraining from borrowing on the London market for the next two years, the total borrowing of local bodies on London being .£20,(>OO.OOO in the last ten years. The Darling scheme, which was submitted to the Imperial Economic Conference, was outlined, showing how to render mobile the .£21,000,000 on gold hold .by Australian banks by using this money as a basis for the. establishment of currency bills in Australia and gold, bills in London. Gold cannot be placed in circulation while its intrinsic value exceeds its currency value. Reference , was also made to the Eng-lish-Egyptian scheme, which received such favourable comment at the Imperial Conference, and which for ten years has worked successfully between England and Egypt. This scheme involves the placing in London of a fund in the form of negotiable : securities; When required sterling could be realised in London or currency in the Dom’nionsl The virtue of the scheme is that it operates beneficially during the height of the exporting season, the currency automatically retiring itself when the economic demand /is satisfied.