THE EXCHANGE RATE

Waikato Times, Volume 112, Issue 18802, 25 November 1932, Page 8

THE EXCHANGE RATE

OBJECTIONS VOICED. MEMBERS OF PARLIAMENT. MEMORIAL PRESENTED. WELLINGTON, Thursday. To-day, on behalf of 20 members of Parliament a memorial expressing objections to any suggestion of political interference with the ' exchange rate was presented to the Prime Minister, Mr Forbes, and the Minister of Finance, Mr Stewart. A copy of the memorial was also sent to the chairman of the Associated Banks.

Actually, nine members signed the memorial, namely, Messrs. A. Harris, B. A. Wright, A. J. Stallworthy, W. A. Veitch, H. Holland, W. A. Bodkin (Coalitionists), C. A. Wilkinson, H. Atmore (Independents), and H. M. Rushworth (Country Party). Other members who did not sign expressed general support of the statement, while several members, who were expected to have signed, are still absent from Wellington.

SIR H. BEAUCHAMP’S VIEWS. A BOUNTY FAVOURED. LESSER OF TWO EVILS. (By Telegraph.—Press Association.) WELLINGTON, Thursday. Disagreement with the proposal to artificially raise the rate of exchange was expressed by Sir Harold Beauchamp, who returned by the Rangitan e to-day. Sir Harold said that during his stay in London as member of the local board of the Bank of New Zealand, lie was constantly in touch with eminent financial authorities. These men earnestly desired to bring about an expansion in trade between Britain and New Zealand and were hopeful that expansion would come as a result of the Ottawa Conference, but they viewed with apprehension any attempt to raise the rate of exchange unduly, as this would seriously affect the export trade to the Dominion. Sir Harold said also it would offset in a large measure the advantages gained by way of preferences arranged at the Ottawa Conference. “I understand, however, tliat this is a burning question in New Zealand at present,’’, he said, “ and the outcome of the move to raise the exchange will remain to be seen. I. have my own opinion on the subject, but 1 do not know the minds of my fellow-direc-tors." A Class Tax.

“ Before I left London,” he said, “ financial authorities there knew of the strong attempt by the general manager of the Bank of New South Wales to raise the New Zealand exchange to parity with the Australian rate, and at that time I expressed the opinion that this question would oe revived in New Zealand by those interested on account of the pastoralists. Higher exchange would really amount to a class tax on the community outside the farmers, and it is a question whether farmers would benefit to the extent that it is expected if the exchange rate were raised to 25 per cent. Once the exchange rate is raised, it is difficult to get it down. “ From that point of view, I am inclined to favour the establishment of a bounty, which is easier to remove when no longer necessary. The point is that in the past the rate of exchange invariably has been based on New Zealand’s trade balance, it should continue to be so based, especially in view of the favourable balance we have in London at present. Farmers have been treated in a very liberal manner by their mortgagees, who have not the slightest idea of putting them off their lands. Therefore it would be unfair to penalise the rest of the community to give further assistance to farmers, witli whom, however, every sympathy is due owing to the low prices ruling for their produce. I would regard a bounty as being the lesser of two evils.”

CANTERBURY FARMERS’ REQUEST. RISE TO 30 PER CENT. (By Telegraph.—Press Association.) CHRISTCHURCH, Thursday. “ That this executive urge the Government to take immediate steps to remedy the present lack of balance between money and prices, which is exhausting the country, by raising the rale of exchange on London at least by 30 per cent., this being the only remedy in sight to save the whole country from bankruptcy,” was the text of a resolution carried at a meeting of the North Canterbury Farmers’ Union yesterday.

BANK OF NEW ZEALAND. MEETING OF DIRECTORATE. WELLINGTON, Thursday., The 'outcome or the important meeting of Ihe directorate of the Bank of New Zealand to-morrow to discuss the exchange rate question is causing keen speculation in political circles. It is staled that the views of the directors on the merits of the proposal to raise the rate are somewhat divergent, but there is a slight preponderance of opinion among observers that an alteration in the rate is not likely.

Should no alteration he made, and no alternative plan for helping the farmer suggested, the question will then become entirely political and increasingly difficult to control without causing serious embarrassment to the. Government.

AUCKLAND MANUFACTURERS. OPPOSED TO CHANGE. AUCKLAND. Friday. The suggested raising of the exehan.se rate was discussed at a meeting of Ihe general committee of liio Auckland Manufacturers’ Association yesterday, and it was unanimously decided to oppose any change. : in next column.)

MEMBERS OF PARLIAMENT. MEMORIAL TO MINISTERS. (By Telegrapn.—Press Association.) , WELLINGTON, Friday. A memorial expressing objection to any suggestion of political interference with (the- exchange rate was presented to the Prime Minister and the Minister of Finance, Hon. Downie Stewart, on behalf of twenty members of Parliament. A copy of ttie memorial was also sent lo the chairman of the Associated Banks. Actually nine members signed the memorial —namely, Messrs Harris, Wright, Stallworthy, Ycitrh, 11. Holland, Bodkin, Wilkinson, Atmore and Rushworth. Other members who did not sign expressed general support of the statement.