EXCHANGE MOVEMENT

Taranaki Daily News, 23 November 1932, Page 9

EXCHANGE MOVEMENT

GOVERNMENT HOLDS, ALOOF

POLITICAL PRESSURE DENIED.

DEPUTATION OF IMPORTERS. DIFFICULTIES OF THE COUNTRI By Telegraph.—Press'Association. Wellington, Nov. 22. Another definite statement that it was not the intention of the Government to interfere with the banks with regard to exchange was made to-day by Mr. G. W. Forbes in reply to a large deputation organised by the New Zealand Importers’ Federation. He emphatically denied that any political pressure was being brought to bear on the banks, but defended the right of the Government to consult with the management of the Bank of New Zealand, which was the Government bank.

Mr. Forbes scouted the suggestion that a central reserve bank was being held out as a lever to the banks, and stated definitely that the Government intended to pass legislation this session. He also, stressed the necessity for reducing internal costs. He indicateck that one of 'the first things the Government would have to tackle on the return of Mr. W. Downie Stewart, Minister of Finance, was the reduction of, interest rates. Mr. Forbes said that next year New J Zealand would be faced with the, most difficult year in the history of'the country, and the Government had to take steps to increase the revenue in order to meet its obligations. No doubt interest in New Zealand was too high. The Government would have to see what could be done to lighten the load. If it did not lighten the load the country was , going to get into far greater difficulties than were known before. Whatever was done was going to cost hardship to somebody. Australia had been able to arrange a conversion loan at 3| per cent., but in New Zealand they Were selling securities over the counter at 5 per cent, and were experiencing difficulty in having them taken up, > DANGER TO LOCAL BODIES. APPEAL MADE FOR PROTECTION. - Auckland, Nov. 22. < The chairman of the Transport Board, Mr. Allum, said at a board meeting that if the exchange rate were raised io 25— . but he could scarcely believe it possible ‘. —the board would have to pay £20,000 exchange on its London interest payments, an increase of £12,000. It would .< mean that all the good work done in trying to get capital charges reduced

Would be nullified. Mr. H. G. R. Mason, M.P., thought, that the Government should be asked to indemnify local bodies against any increased costs imposed by high exchange. The board resolved to ask the Prime Minister to take such action as would avoid placing additional burdens oh local bodies. . “HAVE CAUSED' A SENSATION.” DETERMINATION OF MOVERS. (By Wire— Parliamentary Reporter.) Wellington, Last Night “Our action has caused a tremendous sensation,” one of the prime movers in . the agitation for increased exchange said to-night when commenting on the position, “but it is imperative that something should be done and we will have to go on with it.” It seemed certain that the matter , would come before the House, he said. No matter What arguments might be brought forward against a higher exchange rate the fact that the producers of the country were in urgent need of assistance would not be altered. Continuation of the present conditions would inevitably mean the ruin of a large section of the farming community, and wholesale failures would just as inevitably bring about the ruin of mercantile firms. The final result' of such a landslide did not bear contemplation. As far as can be gathered the opposition is anxious to have the whole question brought before the House, and there is a feeling in the lobbies that the Govj eminent will give members an opportunity to discuss- the question rather than have a discussion forced by me Opposition. Evidently a number of members is certain that an early opportunity ' for discussion will be forthcoming because it is understood they are busily preparing their speeches. What course will be pursued to secure an opportunity to open the debate is not known, but it is thought likely that something will develop during the present week.