NEW PROBLEMS

Taranaki Daily News, 20 January 1933, Page 7

NEW PROBLEMS

BRITISH PAPER’S WARNING EFFECT OF HIGHER EXCHANGE LIABILITY OF GOVERNMENT PURCHASE OF SURPLUSES MORAL BREACH OF OTTAWA By Telegraph—Pres* Amn.-Copyright Rec. 7 p.m. London, Jan. 19. “It is significant that all along Mr. Downie Stewart opposed any arbitary tampering with exchange,” says the Financial News, discussing his resignation. “If the Government has decided the rate ought to .be raised in order to help the farmers they will find themselves faced’ with many new and difficult problems. “If a change in the rate is imposed on the banks the Government will find sooner or later it will be obliged to undertake the purchase from them of any surplus exchange, as did the Commonwealth Bank a year ago.

“Moreover, primary producers will benefit only for a time. Ultimately domestic prices will rise and, moreover, the increase will be a moral breach of the Ottawa agreements.” PRIME MINISTER RETICENT MUST WAIT FOR STATEMENT. ft. ----- CABINET TO MEET ON TUESDAY. By Telegraph.—Press Association. Wellington, Last Night. A statement regarding the reply by the Prime Minister to a deputation representing the New Zealand Importers' Federation concerning the exchange position was made by Mr. Edwin Salmond, president of the federation, today. “To all questions,” said Mr. Salmond, “the answer was returned that the time was not ripe for any statement as to what Cabinet had done or intended doing. We were told we must wait until an official statement was ready. “The Prime Minister was asked whether there was any truth in the persistent rumour that the banks had been indemnified against any loss following on a high exchange level. To this there was no reply, but it is significant it was not denied,” added Mr. Salmond. Mr. Forbes, observing a strict policy of reticence, reiterated yesterday’s statement that he had no comment to make regarding the political situation. He informed a reporter that a caucus of the Coalition Party would be held on Tuesday, when there would be a general discussion of the Government’s policy. PROTST FROM IMPORTERS RESOLUTION IN CANTERBURY. FORMER ASSURANCE RECALLED.

Christchurch, Last Night.

The Canterbury Importers’ Association has carried the following resolution: — “This meeting strongly protests against any further attempt being made to artificially increase the. already high exchange rate. The business community has been assured by the Government that the regulation of exchange is entirely a matter for the banks. The associated banks have definitely decided against this policy of inflation Which, if carried into effect, must increase the cost of living as well as all costs of production. “The higher rate of exchange will inevitably mean heavier taxation to meet the increased cost of remitting to London Governmental and local body funds. The primary producers of the Dominion cannot receive more than a proportion of any additional income resulting from an increased rate of exchange.” OPPONENT IN COALITION. MR. WRIGHT DISLIKES RISE. Wellington, Last Night. “I know that if the exchange rate rises the cost of living will go up, and I am not in favour of it,” said Mr. R. A. Wright, M.P. (Coalition), when opening the Karori Horticultural Society’s show this afternoon. “I am strongly opposed to a high exchange,” he added. “I do not know that it i" going to do the farmer much good, or in the long run any good, and the rest of us will have to pay.”