EXCHANGE RATE DEFENCE

Taranaki Daily News, 18 April 1934, Page 6

EXCHANGE RATE DEFENCE

REPLY MADE TO CRITICISM STRAIGHT TALK BY MR. FORBES. BRITAIN’S DEPRECIATED CURRENCY NEW ZEALAND’S NEED GREATER. By Telegraph—Press Association. Wellington, Last Night Straight talking characterised an address by the Prime Minister, the Rt. Hon. G. W. Forbes, to members of the Wei- ? lington Chamber of Commerce at its annual meeting to-night. Mr. Forbes, who warmly defended the policy of the Government during the last two years, deprecated much of the criticism which had been levelled at the Government "by the stern-faced men who sit at tables and pass solemn resolutions without due appreciation of the difficulties with which the Government has to contend.” Naturally, said Mr. Forbes, there would be criticism of what the Government was doing, but at the same time a little appreciation of the work of the Government would be encouraging. The men who were always finding fault should look overseas. The present progress of Britain was a direct result of the maintenance of a policy which was deemed by the Government to be sound in its essence.

Referring to criticism of the New Zealand Government’s action L; raising the exchange rate Mr. Forbes pointed out that when Britain went off the gold standard and depreciated its currency by 30 per cent, thereby its action was applauded as being very sound. This was done at a moment’s notice. Yet when th® Government of New Zealand raised th# rate to 25 per- cent, it was roundly condemned from many quarters.

“I ask you,” said Mr. Forbes, “when is England going back on gold? The average business man in Great Britain hopes it will be never. There the depression resulted in a drop of 18 per cent, in .the national income, whereas in New Zealand ours has fallen away by 35 per cent. .

"When in England I asked the people there to remember that we were in a much more difficult position and had to adopt measures which we had hoped to avoid. I asked them to realise that ye had to do the best we could, and in raising the exchange we were doing the only thing we could to encourage our export industry. But you will notice that our critics did not say Grea Britain wai doing wrong in going off gold."