CURRENT COMMENT

Waipukurau Press, Volume XXVIII, Issue 30, 27 January 1933, Page 2

CURRENT COMMENT

y — OF SPECIAL MOMENT EXCHANGE ON LONDON “What we had feared has come to pass, and the exchange on London has been increased to 2 5 per cent,” comments the “Wairarapa Daily Times” (Independent Reform). “We consider the action of the Government is a serious mistake, but are open to conviction. We are in accord with the views of the “Financial News” (London), one of the authoriative newspapers of the world, which stated that “if the Government decided that th 6 rate ought to be raised in order to help the farmers, they will And themselves faced with many new and difficult problems.. . and,

moreover, primary producers would only benefit for a time. Ultimately domestic prices would rise, and, moreover, the increase will be a moral breach of the Ottawa Agreements." The Hon. W. D. Stewart, Minister of Finance, by his resolute stand, has earned the deep respect of the people of New Zealand from the North Cape to the South. Mr. Stewart, through being behind the scenes, was in an excellent position to judge as to the wisdom of the course adopted by the Government, particularly from the financial point of view of the Dominion. Not only will the rising of the exchange rate have a definitely adverse effect on the budget to the extent of about £3,500,000 but the Government has undertaken to guarantee the banks against loss on the exchange. This, we venture to

predict, will be a very considerable sum of money. The exchange die has been cast, and the people of this Dominion must ‘endeavour to make the best of what appears to us to be a very bad job." “ A HAIR OF THE DOG ” “Financial recovery can only come in New Zealand when we have stabilised conditions. It is difficult to see how a high exchange rate involving the country in indemnifying the banks can contribute to stability. The most that can be hoped for is that this form of inflation will temporarily alleviate the farmer’s plight. We can only hope that before the next producing season, farmers will not, as in Australia, be clamouring for a hair

of the dog that bit them.”- —Dannevirke News (Reform). “BAD DEVELOPMENT” The “Dunedin Star” (United-Coali-tion) says: “It has been an old complaint that the banks controlled the Government. The Government has controlled the banks by its latest course in a most startling manner, and we can only regard that as a bad development. Banks should know their own business better than anyone else could know it. Dictation of their policy can easily be more dangerous than almost any other Government interference with commerce or industry. Mr. Stewart’s sacrifice will cause his reputation to shine brighter. . . The Government's position will not be endangered by his.

withdrawal from it, but there is no doubt that the Government will be weakened.” “ DOOR TIGHT SHUT ” Under the heading “A Disastrous Blunder,” the “Evening Post,” Wellington, said editorially: “If the adverse effect were the consequence of an, unavoidable rise to a higher true level, it w T ould have to be met: but it has not been argued by those qualified to give a judgment that 25 per cent, is anything but artificial. The “Post”* asks how the additional cost of over £3,000,000 on the State is to be met, and, further, whether Government has reckoned the burden on importers and local governing bodies. It concludes: ‘Has the Government ascertained, in something better than

round numbers and percentages, the true position of the exporters, the urgency of their need, and how far the largess now to be indiscriminately distributed will be intercepted by creditors and applied to keep land values still inflated? These are questions which a Government which has rushed into inflation should be ready to answer without delay.”