CABINET CRISIS

Wairarapa Daily Times, 21 January 1933, Page 5

CABINET CRISIS

RESHUFFLE OF PORTFOLIOS I COATES TAKES FINANCE. WELLINGTON, Friday. His Excellency the Governor-General Las accepted the resignation of Mr Downie Stewart as a member of the Executive Council and a Gazette notice .announcing the resignation will be published shortly. Consequent on Mr Stewart's resignation there has been a reshuffle of portfolios. The Prime 'Minister stated this aftermoon that the portfolios of Finance and Customs would be taken by Mr Coates, who would be relieved, within a day or so, of Public Works and Transport. The portfolio of Employment would be administered by the PostmasterGeneral (the Hon. A. Hamilton) who would hand Internal Affairs over to the Minister of Health (the Hon. J. A. Young). Mr Forbes said that he himself would assume the Attorney-Generalship Wf». in the meantime. W The Prime Minister also stated that there would be no move made to fill the vacancy caused by Mr 'Stewart’s /resignation until after the session. When the vacancy was filled there would bo a further rearrangement of portf olios.—(P.A.)

EXCHANGE ISSUE TEST. WELLINGTON, Friday. It is considered certain that the Opposition will take the earliest possible' opportunity of testing the feeling of the House of Representatives on the exchange issue, and the opinion held in Parliamentary circles is that a want-of-confidenee motion will be launched by the Leader of the Opposition (Mill. E. Holland) on Thursday. It is stated that the debate on the motion will be restricted to very few speakers, and it may be found that the statement of Labour’s case will be confined to Mr Holland and one other

member of the party, probably Mir M.

J. Savage (Auckland West). Memof the Coalition Party who are ‘-*Spp<i;iposed to exchange inflation will probably take an opportunity -of stating tlieir views. Mr Stewart no doubt will also make a statement to the House, and the Prime Minister and Mr Coates may be expected to defend the Goyernmcut’s fiction. Under the forms of the House, it will be necessary for the Prime Minister to grant facilities for a, no'-con-fideuce debate. Mr Forbes said to-day that it was not his intention to place any obstacles in the way of a debate on the Government’s policy. Some speculation lias taken place as to the possible result of a division on a no-confidence motion based on the exchange issue, but it is gathered that members of the Government are confident that they will be able to carry the day.—(P.A.)

COALITION CAUCUS. z WELLINGTON, Friday. As soon as Cabinet reached the final decision on the exchange question this morning, telegrams announcing the decision were forwarded to all members of theX'oaliiion Party. Members were '-tsked to be in attendance in Welon Tuesday next to attend a 'caucus. No arrangements have yet been made by the Labour Party for the holding of a caucus, but no difficulty would be experienced in securing a full meeting of the party on Thursday.—(P.A.) ‘ * CONTROVERSIAL PROBLEM.” - OTHER MEASURES FORECASTED. WELLINGTON, Friday. “The exchange rate is a controversial problem on which there has been no lack of discussion,” said Mr Coates to-day. “The pros and cons have been set forth exhaustively, and the arguments are fresh in the public mind, so that it is needless to say much at this juncture. The wisdom of the action that has been taken can only be borne out by experience. “I believe that the decision of the Government to take a part, anil, indeed, to assume responsibility in the matter, null be shown to be justified. Tirpp will tell. Personally, I am quite to await the considered judgment which will be given in the light of experience, and to accept my share of the responsibility. •‘Many arguments were raised against an increased rate of -exchange, and to everyone of these we have given careful thought. Some, of these contentions are certainly of considerable weight and appear valid. I can well understand reasonable-minded persons believing that the objections outweight the' advantages. It is all a matter of one’s point of view, and this is a time when thoughtful people must make an effort to- understand other viewpoints. At least it can be said that the Cabinet has taken full account of every opposing argument and have decided on a course of action with a clear understanding of the objections. “The resignation of the Hon. Mr • Downie Stewart,” concluded Mr Coates, “is a matter which I regret for personal reasons and I join with everyone in regretting on public grounds the loss of his services at the ' present juncture. We have been colleagues together in office and in Opposition. I had hoped that he would have been able to continue in office, c» though compromise is of the esof coalition government. But,

if a Minister (finds himself unable to concur in. a decision, it is of course , his inherent right, which nobody can deny to a public man.' Mr Downie Stewart r s broadmindedness is universally acknowledged, and though he is not in office the Government will, I am sure, continue to have his friendly sup-

port, ‘‘ We do not believe that a variation in the exchange-rate will of itself solv-e the Dominion’s difficulties. This is merely one step in the necessary measures of adjustment in bringing monetary receipts and costs of production into line. At the moment they are serious out of line, and widespread dislocation is the result. Primarily this concerns farmers, though fill industry is affected and employment suffers accordingly. The increased exchange-rate by no means removes the need for other measures.

These are engaging the Government’s attention and may be revealed by the Prime Minister next week.

“Nobody pretends that the increased exchange-rate will at once ease the Government’s budgetary problem. It will, on the contrary, cause the budgetary position to be increasingly difficult* in the early stages., Yet if the. change is in tlio interest of the economic soundness of the country, as we believe it is, and particularly in the interest of tho basic primary-producing industries, it must strengthen also the stability of our public finance when the initial difficulties are overcome.

“A substantial increase in the national income, as represented in New Zealand currency, of the order of ten to twelve millions, will result from the. higher exchange rate. This will give a much-needed stimulus to trade and industry and wil strengthen buying power. Incidentally, it must tend to augment the receipts of the Government and other public bodies, and to this extent it will assist the public finances. ’ ’ —(P.A.)

A BOARD SAVES £7OOO.

INVERCARGILL, Friday

In anticipation of a rise in tho exchange rate, the Southland Electric Power Board recently remitted by mail to London a sum of £45,000, being interest due in March next on overseas loans. This timely action will save the board £7OOO in exchange. Other Southland local bodies have also taken similar action and certain exporting firms have allowed funds in London to accumulate in order to get the benefit of exchange fluctuations. —(P.A.) CONSTERNATION IN AUCKLAND. AUCKLAND, Friday. Representatives of local bodies and the commercial community received the exchange announcement with consternation, the latter describing it as a panic measure. The Power Board and the Transport Board, which are facing maturing loans, will have to meet greatly increased expenditure in London. Mr M. J. Sav’age, Deputy-Leader of the Labour Party, said that the decision was disastrous. He suggested that the remainder of the Ministry might profitably follow Mr Stewart’s lead. The development was evidence of the disintegration of the Coalition. Criticising the decision, Mr E. C. Creagh, president of the New Zealand Stock Exchange, predicted extra taxation and increased cost of living. The Government had followed the advice of university professors in preference to that of sound business men and bankers. —(P.A.)

INDEMNITY AGAINST LOSS. WELLINGTON, Friday. The Prime Minister announced today that one of the (first jriec.es of legislation to be introduced when the session of Parliament resumes next. Thursday would be a Bill to provide' for the indemnification of the banks against any loss resulting from the high exchange. Mir Forbes said that this Bill would give members an ample opportunity to discuss the whole exchange position. The measure would be put through as quickly as possible.— (P.A.)