MOTIVES OF GOVERNMENT

Taranaki Daily News, 21 January 1933, Page 7

MOTIVES OF GOVERNMENT

GENERAL RELIEF EXPECTED OBJECTIONS CONSIDERED SERIOUS NEED OF PEOPLE COMMENDED TO GOODWILL By Telegraph.— Press Association. Wellington, Last Night. The Prime Minister, Mr. G. W. Forbes, announced last night that, following the adjournment of Parliament, the Government had been exhaustively reviewing the economic and financial position of the Dominion, and particularly the serious predicament in which primary producers found themselves as a result of the further disastrous fall in export prices. The Government had caused a comprehensive review of the economic state of the country to be made during the past year, which indicated the serious nature of the position and that it was becoming increasingly difficult. In the light of the information thus disclosed, and as a result of a close survey of the position by the Government, it had been decided that it was in the best interests of the country that the New ZealandLondon rate of exchange for telegraphic transfers should be raised to £125 at the earliest possible moment, other rates to be- raised correspondingly. The Government had further arranged with the commercial banks trading in New Zealand to co-operate with the Government in giving effect to this decision. At the same time an undertaking had been given to indemnify the banks against any losses that might be incurred on the sale of exchange purchased at that figure. “The Government recognises,” said Mr. Forbes, “the far-reaching nature of the decision. The position of the Dominion to-day, and the sad plight of so many of our citizens (farmers and unemployed workers especially) render it imperative that some measure of relief should be immediately forthcoming. For these urgent reasons Cabinet believes that its action in this emergency is justified. It feels that the present difficult position will be thereby eased and that some of the hardships of excessive deflation will be avoided. The relief thus afforded will, in the opinion of the Government, result in mitigating the present unemployment position, and moreover will assist in bringing about a much-needed impetus to industry. “It is with this sincere conviction that the proposed rate of exchange will benefit the community as a whole that the Government commends this course of actidn to the goodwill of the people of the Dominion.” RESPONSIBILITY ASSUMED. The Rt. Hon. J. G. Coates expressed the belief that the decision of the Government to take part and Indeed assume responsibility in the exchange problem would be shown to be justified. Time would tell. He was prepared to await the considered judgment which would be given in the light of experience and to accept his share of the responsibility. The Cabinet had taken account of every opposing argument and decided on the course of action with a clear understanding of the objections. The increased exchange rate by no means removed the need for other measures. These were engaging the Government’s attention and might be revealed by the Premier next week. “For myself I say deliberately that when the country and the people are facing a crisis the Government must play its part in guiding the economic forces along the channels which they believe will bring recovery. That is a responsibility which no Government can disclaim at such a time.” Mr. Coates expressed regret at the loss of Mr. Stewart’s services at the present juncture. Though he was not in office the. Government would, he was sure, continue to have Mr. Stewart’s friendly support