THE EXCHANGE POOL.

Waikato Times, Volume 111, Issue 18625, 3 May 1932, Page 9

THE EXCHANGE POOL.

RELEASE BY GOVERNMENT. MR D. JONES’ OPINION. Approval of Ihc Government’s intention of releasing Hie exchange credits pool by the end of June was expressed in Christchurch financial circles. The decision to lerminate Ihc operation of the pool was probably hastened, it is thought, by the recent raising of a loan of £5,000,000 in London, which must assist in making the general exchange position easier. Remarking that, the primary producers of the Dominion in particular would feel great satisfaction, Mr D. Jones, chairman of 1 ho Meat Producers’ Hoard, expressed to a Christchurch Sim re purl or his .conviction that freedom for exchange would not affect I ho country's credit, in the slightest degree. An exporter did not think there was' need io release Iho pool before the end of June, though Hie deputation ot producers and slock and station agents wludi waited on Hie Minister of Finance (lion. W. Downio Stewart) urged the immediate abandonment of Hie pool. The Dominion’s export season was sufltcienlly near Us end for the retention of the poo! in the meanlime to have comparatively little effect. May Bo Imposed Again. If was thought in one quarter that some restriction might again be im-

posed on exchange between New Zealand and London towards the end oi the year, when it might be noccssaiy to meet commitments in Londonlocal body loans, for instance at a time when New Zealand’s import trade was increasing with the Christmas requirements. “It appears to me that releasing of I he exchange is a direct outcome of the £5,000,000 loan recently raised, another exporter said. “To have such a sum in London must make Lie exchange position easier.” It was certain that financial authorities in England thought that New Zealand had pursued a similar exchange policy to that of Australia, sai-.l Mr Jones. This was entirely incorrect, and would account for some of the expressions of support from overseas. “I have no fear that freedom for exchange will affect our credit —this is one of the many fallacies put lot'ward in the course of the past two years by financial people, but it is now ilead. The same sort of fear was expressed in connection with the credit of Great Britain, but what has happened is the reverse lo what was reared. English and Australian exchange has varied in the past year, vet Australian credit is higher to-day ihail it was 12 months ago—and but for the Lang Government would he much higher—while English credit stands supreme. Higher Pclco for Products, “An real, effective rehabililalion of New Zealand's finances was possible J without giving a. higher price for their products lo our primary producers,” .Mr Jones went on. “This principle is J

recognised In all producing countries to-day. “When I took up this matter nearly 12 months ago I strenuously advocated that borrowing in London do- stopped, and that our exchange rate be allowed to go as high as it would. If that policy had been followed ayc would now he in a much sounder position than wo arc. We have lost a year. Still, there is some measure of satisfaction in knowing lhal our object lias now been achieved.” 11. was impossible for New Zealand to compete with her rivals Avhilc they had such substantial advantages. Their exchange was continually increasing their production, while the loss of exchange was causing very great concern about the future production of the country.