LEASE-LEND AGREEMENT

Bay of Plenty Beacon, Volume 7, Issue 54, 7 March 1944, Page 6

LEASE-LEND AGREEMENT

DOMINION AND AMERICA

PRICES AND EXCHANGE

A letter regarding certain aspects of the Lease-Lend, and Reverse LeaseLend agreement between the United States and New Zealand, and the rate of currency exchange between the two countries, was received from the. Acting-Minister of Finance, Hon D. G. Sullivan by the Auckland Provincial Executive of the New Zealand Farmers' Union at its monthly meeting on February 16. The communication was in reply to requests for information on these matters.

The Minister stated: t "The main goods supplied by New Zealand to the United States are primary products and supplies to New Zealand are chiefly manufactured products. It is: significant aiso that the New Zealand Government has pursued a vigorous stabilisation policy which has had the effect of maintaining a reasonable price level in this country. By the payment of subsidies prices of staple commodities in New Zealand have been maintained at little above pre-war levels. In supplying these commodities to the United States forces the price charged is, wherever practicable, inclusive of the subsidy in respect of that particular commodity, so that the price, to the United States is higher in these articles than the domestic price to the New Zealand consumer. "Prices of Lease-Lend goods supplied by the United States to New Zealand are determined by the cos:t of manufacture, plus transport and other charges. I am. not aware that the American Government pays any subsidy to keep down the cost of production, in any way. Fundamentally the difference between the price rates of the goods supplied by the respective countries is to be i'ound in the successful and determined stabilisation policy adopted by the New Zealand Government in the interests of the people as a whole.,

"In regard to the exchange rates between the two countries, the Minister said: "The American forces either pay their troops in dollars brought into the country from. America, or in New Zealand currency* which is provided by the Reserve Bank at the official, rate of exchange. The dollar holdings thus established in this country are available in New Zealand for purchases in America,. As far as the actual exchange rate as between the two countries is concerned, you'will appreciate that while a fixed ratio as between New Zealand currency and the. United Kingdom £ obtains, the rate between this country and the United States is automatically determined by the relationship between the United Kingdom £ and the dollar." In replying to a further communication from the Executive respecting the Government's attitude to different proposals for international currency control the Minister stated that the Government was not committed to either the "bancor" or the "unitas" scheme, but was examining all proposals put forward in the light of its policy that the Government itself must have control of all phases of New Zealand banking and currency. "All proposals," he added, "are being carefully examined." The. letters were formally received.