THE EXCHANGE RATE.

Waikato Times, Volume 112, Issue 18802, 25 November 1932, Page 10

THE EXCHANGE RATE.

EFFECTS IN AUSTRALIA. CONSIDERED OPINIONS. Some very definite views as to thß effects of high exchange In Australia are expressed in cable messages received in Wellington in response to requests for considered opinion on the question. One very well-known and highlyesteemed authority, Tepresenting important exporting interests, cabled as follows: — “The effect of Australia establishing an exchange rate of 25 per cent, below sterling is to hold up a false position and prevent a positively necessary adjustment. Costs are not fall- y mg, or falling very little. “Transport charges cannot be, and are not being, reduced, holding Government expenditure at a higher figuro than should be the case with raw commodities at present sterling prices. “Big increase in taxation due to exchange on overseas interest commitments. "Making (lie difference in price beIwccn raw materials and manufactured articles 100 wide. Creating False Sense of Values. “Holding land values at above thehr competitive capacity with other expoit countries; creating a false sense of

values “Keeping ineftleient and hopelesslyinvolved producers in production for longer than should be Hie case, thus prejudicing to an extent sound pioilucers. “Delaying a situation which eventually has to he faced. “increase in exchange may stimulate exports, but to the detriment of price level in importing countries. A mercantile company director or high standing and ability also expressed the opinion that the exporter does not derive any permanent benotit from a depreciated currency; and from a wider standpoint it creates un->-certainty and loss of confidence over-* The managing director of an import-*-*’’ big and manufacturing company* rallied: “Very disturbing and requit’-* in- far-reaching adjustments. Shut, mi! many import linos and ruined many]) [in, purlers. On Hie other [impetus lo local manufactures.