EXCHANGE RATE

Timaru Herald, Volume CXXXVII, Issue 19783, 26 April 1934, Page 8

EXCHANGE RATE

“ REDUCTION WOULD BE UNWISE” ECONOMIST EXPRESSES HIS VIEWS By Telegraph—Press Association WELLINGTON, April 25. The view that the Government would be unwise to lower the rate of exchange in the present depressed and obscure circumstances was expressed by Mr D. O. Williams, M.A., Lecturer in Economics at Massey Agricultural College, in his reply to a questionnaire put to him by the Parliamentary Monetary Committee. The lowering of the rate might conceivably be justified if the Government were certain that external prices would rise sufficiently to restore the profit structure of farming, Mr Williams said, but there was no such certainty, and the risks of undermining still further the farming industries while they still remained our major course of income were too great to be assumed. Mr Williams’s reply to the questionnaire, came before the committee on Monday, but the Hon. W. Downie Stewart and the Treasury representative objected to its being put in as it was contended that the question of the high exchange did not come within the order of reference of the committee. Accordingly the question was held over until Tuesday afternoon, when the committee deliberated upon the point in committee, and the chairman was authorised to release Mr Williams’s answers. Mr Williams stated that he thought that stabilisation should be effected through devaluation at the rate of £125 New Zealand to £IOO, since a lower rate was likely to have serious repercussions on the Dominion’s key industries, while a higher rate was, be believed, inexpedient at present. Mr Williams added that he thought that the sphere of exchange control was a proper field for monetary experimentation in this country, and strongly urged that its utility as a weapon of economic control should be more thoroughly explored.