EXCHANGE PROBLEM.

Waikato Times, Volume 112, Issue 18805, 29 November 1932, Page 7

EXCHANGE PROBLEM.

COALITION INTACT.

CRITICISM OF BANK.

FARMERS’ RESOURCES EXHAUSTED WELLINGTON, Monday. The Hon. A. D. McLeod (Government—Watrarapa) discounts any suggestion that the exchange issue is likely to cause a cleavage in the ranks of the Coalition Party. Mr McLeod has taken a prominent part in the agitation for a higher exchange rate. He said this evening that he had been actuated by a desire to impress the Cabinet with the necessity for doing something to help the farmer during a crucial period, and he felt confident that the Cabinet would evolve a plan which would be of benefit to primary producers. In discussing the decision of the Bank of New Zealand not to raise the exchange rate, Mr McLeod said he was not surprised at the bank's action, nor did he think those associated with him in the deputation to the Cabinet would be surprised. “The decision of the bank, however, or an uproar from importers and other city interests, does not solve the problem of the wide (disparity between the exchange values of farmers’ products and the values of non-farmers’ goods and services,” said Mr McLeod. “If bankers, importers, traders, investors, local manufacturers, professional men and others in cities, having no direct interest in farm production, feel that they can stand aside uninterested and uninjured spectators, while the farming industry collapses, then they are due shortly for a very rude awakening. The fact is that for close upon three years now most of the Dominion’s exporting farmers have been carrying on out of reserves or on money borrowed against assets. In the case of four out of five exporting farmers to-day, both those financial wells are dry, or very nearly so." No Reasonable Excuse. Perhaps a reasonable excuse could be found for the attitude taken up by the other banks trading in New Zealand, but not for the Bank of New Zealand, said Mr McLeod. The Bank of New Zealand was the Government bank, just as the Bank of England was the British Government’s bank. Nearly 40 years ago a great statesman had not hesitated a moment in placing behind the Bank of New Zealand the whole assets of every man and woman in the country. Many years later, an equally great statesman, viewing the possibility of a future crisis arising in New Zealand, had built up In London to the sum of £2,000,000 what amounted to a Government cash reserve available for any financial emergency. In the last days of 1931, said Mr McLeod, with that London reserve exhausted for other purposes, a grave crisis suddenly did arise. Did the Bank of New Zealand put Its resources unreservedly behind New Zealand s people and”the Government? It did not, without exacting its price, and that price was all to the disadvantage of the people ’first 'responsible |flor producing what alone could meet the Dominion's overseas interest payments.

y HIGH RATE URGED. OPINION OF OTAGO FARMERS. FURTHER BORROWING OPPOSED cry Telegraph.—Press Association.) DUNEDIN, Tuesday. At a meeting of the emergency committee of the Otago Farmers' Union a resolution -vvas passed strongly opposing further borrowing, and reiterating the conviction that a high exchange is the only immediately effective method of assisting exporters and other sections of the the community. Mr James Begs; said it was often slated that imports would fall off and that balances would accumulate in London. This idea pre-supposes that the purchasing power in New Zealand would decline. That would not, be \he case.