RATE OF EXCHANGE

Wanganui Chronicle, Volume 79, Issue 282, 2 December 1935, Page 8

RATE OF EXCHANGE

A GRADUAL FALL POLICY OF NEW GOVERNMENT NO ACTION BEFORE MARCH GUARANTEED PRICES TO OPERATE WILL TAKE PLACE UF EXCHANGE STATEMENT BY .'IK. SAVAGE

[ Per I re» Association. j AUCKLAND, Dee. 1. An assurance that in reducing exchange to parity with sterling the Labour Government would do nothing which would prove detrimental to the interests of either the farming community or of business circles, was given today by the Prime Ministerelect, Mr. M. J. Savage. He said that it had been reported to him that in some districts farmers were apprehensive regarding the proposed reduction in exchange. The view, apparently, was that they would lose exchange benefits on exports. "Every statement I have made on the subject,” Mr. Savage continued, “is to the effect that the exchange will be brought back io par by a series of gradual reductions. We recognise our responsibilities in full, and know we could not reduce the exchange to par at one step without indicting considerable hardships on many sections of the community. We are not going to rush our fences. Small and gradual reductions will be made so that importers and traders generally will be able to adjust their businesses accordingly. As far as the farmers are concerned, their interests will also be safeguarded. As the exchange is lowered a system of guaranteed prices will be introduced piecemeal, so that when the barrier between ourselves and Great Britain is finally removed farmers will be receiving a full guaranteed priee for their products. Full details have still to he worked out. but that is our general line of policy, and we shall adhere to u strictly."

No Action Likely Before March. "The policy of the Labour Goveminent tn lowering th" rate ot | exchange on London will be to I limit reductions to 2-1 per cent, at' a time, made at well-spaced inter-1 \ais,” Mr. Savage proceeded. “It is fairly certain that no action w.d be taken before March.” Announcement that a gradual reduction of the exchange rate would be commenced as soon as possible by the future Government I has caused some uneasiness in business circles, due to overseas; buying commitments, while a change in the current rate also: has an i.-iportant bearing oni prices paid lor wool and fat stock! during the export season now ■ unde" way. Discussing the post-; lion to-day, Mr. Savage said that it was fully realised what a dis-, turbanee «•, sudden ami drastic reduction in the current exchange; rate would mean. “A gradual lowering of the! rate is intended.” he said. “On! no account will it be more than; -j per cent, at a time, and it may! possibly he less. The policy w ill I not be hurried and the intervals between reductions will be well-: -paced, some months elapsing! between each stc,,.” “1 think tiat export buyers; will be perfectly safe in their; operations this season,” said Mr., Savage. “ft is impossible to say i when the first reduction will be! made, but it is not likely to be| a substantial one. Parliament I will have to be consulted, and 11 do not think there will be any! move before March at least.” Mr. Savage said the Labour! Party believed it understood the principle invilvcd in the exchange policy. He did not think that any Government should be responsible for wrecking an; deals by drastic interference. ‘We want all such traders as are iffected to feel that they are dealng with friends, not enemies,” Slid Mr. Savage. “They will not tie sacrificed, as the future Government will act with full regard io the interests of the community.”