EXCHANGE ON LONDON

Wairarapa Daily Times, 20 January 1933, Page 5

EXCHANGE ON LONDON

RAISED $0 25 PER CENT. PROTEST BY BANKS. WELLINGTON. Thursday. The following statement has been sssued hv the Associated Banks, after a. conference -with the Cabinet: —‘‘‘The Government has decided, after exam3ng aU alternative methods of relief' to the general situation, that it is completely satisfied that the, raising of the London rate of exchange to a basis of telegraphic transfer selling £125 .New iZealand> equal t-o £IOO London, is in the interests of the country. The banks have strongly protested against Governmental fixation of the rate, but the Government has informed them that it must persevere in the matter. Therefore, and on the strong representations of the Government and on its full responsibility, the banks are reluctantly compelled to co-operate -with the Government in giving effect to its decision. The following rates, New Sealand on London, are effective on after 20th January, 1933: Buying (basis £IOO, London). —Demand, £124; 30 days, £123 15&; 60 days, -£129 10s; 90 days, £123 os; 120 days, £1(23. Selling (basis £IOO, London). —Telegraphic transfer, £125;- demand, £124 j 7s id; 30 days, £124 15s; 60 days, £124 12s 6d; 90 days-, £124 10s. NEW ZEALAND ON AUSTRALIA. The following rates, New Zealand on Australia, are effective on and after —Oth January, 1933: V* - Buying (basis £IOO New Zealand). — Demand, £IOO 10s. Selling (basis £IOO New Zealand). — Demand, £99 los. — (P.A.)

STATEMENT BY PREMIER. WELLINGTON, Thursday. The Prime Minister announced tonight 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 producdjifnow find themselves as a result of disastrous fall in export prices, the Government had caused a comprehensive review of the economic so ate of the country during the past year to be made. This, Mr Forbes continued, indicates the serious nature of the position and that it is becoming increasingly difficult. In light of the information thus disclosed and as a result of a close survey of the position by the Government, they liawo decided that it is in the best interests of the ebuntry that the New Zealand-London xate of exchange for telegraphic transfers should be raised to £125 at the earliest possible moment, other rates to be. raised correspond:ngly. The Government has further arranged with the commercial banks trading in New' Zealand to co-operate with the Government in giving effect to this decision. At Die same time an undertaking has been given to indemnify the banks against any losses that may be incurred on the sales of exchange purchased at that figure. ‘‘The Government recognise,” said Mr Forbes, “ the . far-reaching nature of the which has been taken. The position of the Dominion to-day and the sad plight of so many of our ctSLens (farmers and unemployed winters especially) render it imperative that some measure of relief should be immediately forthcoming and for these urgent reasons Cabinet believe that their action in this emergency is justified. They feel that the present difficult position will be eased l 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 a mitigation of the present unemployment position and moreover will assist in bringing about a much-needed impetus to industry. It Is with a sincere conviction that the proposed Tate of exchange will benefit ,the community as a whole, that the Government commends this course of action to the goodwill of the people of the Dominion.” —(P.A.)

DIFFICULT PROBLEMS AHEAD.

LONDON, Thursday

The “Financial News,” disc us sin; the Hon. W. Downie Stewart’s resig nation, says: “It is significant tha aliJ|long he opposed any arbitrar; tampering 'with the exchange. If tin Government decided /that the ratought to be raised in order to help th farmers, they will' find themselves fac ed with many new' and difficult prob lems. If a change in the rate is im posed on the banks, the Governmen will find that, sooner or later, the; will be obliged to undertake the put chase from them of any surplus ex change, as did the ■ Commonweal tl Bank a year ago. Moreover, primar produeers-would only benefit for a time Ultimately domestic prices would ri&' and moreover the increase will be ■ moral breach of the Ottawa Agree ments. ’ 7

SIR H. HIRST’S VIEWS. (Received Friday, 12.15 p.m.) LONDON, Thursday,

Sir Hugo Hirst, managing-director of the General Electric Co., while apprehensively viewing. any step increasing British manufacturers’ difficulties, agrees that New Zealand altered _ the exchange rate only after fully considering all the Government’s interests, and realises; that New Zealand will act in accordance with the spirit of Ottawa.

STEWART’S RESIGNATION.

ANNOUNCED BY PREMIER.

WELLINGTON, Thursday.

The Prime Minister announced this evening that the Hon. W. Downie Stewart'(Minister of Finance) had forwarded to- him for transmission to the 'Gov-ernor-General, his resignation as a member of the Executive Council and also of the Ministerial portfolios of Finance, Customs and Attorney-Gen-eral. The Prime Minister further stated that the resignation had been duly forwarded to His Excellency.

“I can only say,” said Mr Forbes, “that- I received Mr Stewart’s resignation with the greatest regret. With his formal resignation, he sent me a personal letter, a copy of which I am handing to the newspapers for publication. His letter sets out the reasons that have compelled him to sever his connection with the Government. Hefound himself unable to concur in 'iflPdecision on an important matter of policy which his colleagues believe to be in the best interests of the

country in its ptresent economic emergency, and, finding himself in disagreement with other members of the Government, he has withdrawal from Ministerial office. I should like to say,” continued Mr Forbes, '' that as Prime Minister, I could not have washed for a more loyal or delightful colleague than Mr Stewart. His attainments and his ability, combined with his high personal qualities, peculiarly fitted him for the Ministerial position in which he has rendered signal service to his country, particularly in connection with the negotiations of the recent trade agreement with Canada and also at the Imperial Economic Conference at Ottawa, and his subsequent visit to London. I appreciate the reasons which have brought about his resignation, and although he is retiring from the Cabinet circle, I shall always value his personal friendship which has existed between us and which I know Will last till the end of the chapter.”. Mr Stewart's letter reads: —“My dear Mr Forbes, —I regret to say that •,<5 I find myself not in accordance with, the proposal of Cabinet to get the banks to raise the exchange rate and to indemnify the banks against any loss they may incur in carrying out this policy, I feel iit my duty to resign my portfolios and ask to be relieved from office. I need hardly say that I realise the difficulties with which the Government is faced and that it is the duty of each Minister to do his best to harmonise his views with those of his colleagues. You may remember that last year I subordinated my views on the- question of a statutory reduction in interest and on certain questions of taxation in order to agree on a common policy but it is not feasible to repeat this line of action on So important a question as that of exchange. My continuance in the Ministry would therefore be a source of embarrassment, not help, to the Government. I desire to express my thanks to you personally and to your colleagues for the generous help and consideration you have always extended to me during my term of office. I shall be glad if -'-ou will agree to make public this letter at the same time as publicity is •‘•veil to the decision on the exchange question. I shall also be grateful if veu can make i't convenient to release me without delay. In view of the near ami roach of the session, the necessity for your making other arrangements, T do not think there is anything to be pained by waiting for the decision of the Associated Banks, as this may ri.ke some days and is hardly material from my point of view. I enclose for transmission to His Excellency the Governor-General my resignation and will be obliged if it can be despatched as soon as possible. Assuring you of mv continued personal esteem.—Yours x-p-v sincerely, William Downie Stewart. ”—(P.A.)