A BOOMERANG?

Thames Star, Volume LXIV, Issue 18972, 1 December 1933, Page 3

A BOOMERANG?

HIGH EXCHANGE EFFECT.

The Banks’ Indemnity.

RESULT OF BETTER PRICES

CHAMBER OF COMMERCE VIEW

(Special to "Star.”) AUCKLAND, Dec. 1. The possibility of the improved prices for wool and other primary products having a boomerang effect on the Dominion, in consequence of the liabilities the Government may incur in meeting the accumulation of surplus assets in London, under the Banks Indemnity Act, was discussed at the meeting of the council of the Auckland Chamber of Commerce yesterday.

Mr. G. Jackson drew attention to the cabled report from London of renewed i.agitation for the quantitative regulation of cheese and other dairy products. He moved that, realising'; the' disastrous effects to New Zealand of any' restriction of output of dairy produce, the chamber should urge upon the Government the desirability of removing the justification for unrest in Britain by: —(1) The early repeal of the Bank Indemnity (Exchange) Act; (2) the removal of the exchange. impediment to imports from Britain; (3) the early implementing of New Zealand’s obligations under the*. Ottawa agreement/

Dairy Quota Menace.

“Under the Ottawa agreement, we have left but 18 months of free and unrestricted entry for our dairy produce into the United Kingdom,” Mr, Jackson said. “Britain at once implemented her side of the Ottawa agreement, but 18 months have passed and this country, with sublime eompia,eency, has .done practically nothing to carry out her side of the pact. From present indications it appears that it will be fully two years after the agreement was signed before the promised tariff-re-vision is effected.” The recent rise in wool values, he added, would further accentuate tho already serious position arising out of the growing accumulation of London funds, thus making the present high artificial exchange, rate even more uneconomic than at present. This would tend towards a further lowering of confidence among importers, greater irritation among manufacturers in the United Kingdom, a further loss of balance in our economic position and increased Budgetary difficulties. The necessity for compensatory Government' action was urgent if quantitative restrictions of our dairy produce entering into the United Kingdom, was to be avoided. “Mukt Come To An End.”

Mr. A. A. Ross, in supporting the motion, said that unless something substantial and drastic were done soon the country would be in a dangerous position as a result of the exchange rate. Instead of the Dominion getting the benefit of the higher exchange the money was remaining in London. “The liability is being put into a suspense account, but that must come to an end,” added Mr. Ross. “The position is so seriotfe that it is imperative that some action be taken,” said Mr. A. G. Lunn. “Present indications suggest that the export of wool will increase by about £8,000,000, and the country will have to raise £2,000,000 in meeting the 25 per cent, exchange rate. If butter rises the position will be still worse. It makes one wonder whether the Government has . anything in view to meet these obligations.”

A suggestion to adjourn the discussion till next meeting was not approved, and the resolution was carried.