IN A NUTSHELL

Bay of Plenty Beacon, Volume 10, Issue 31, 30 September 1946, Page 3

IN A NUTSHELL

BRETTON WOODS AGREEMENT FARMERS’ UNION STATEMENT The Executive of the New Zealand Farmers’ Union (Auckland Province) has compiled the following statement on the Bretton Woods Agreement:— 1. International Effects: Establishes a monetary system with world wide coverage. At the centre this principal engine of government . is called The Fund. It is controlled by a. Board of Directors representing the member nations proportionate to their contribution to the Fund. The Directors are appointed, not elected, but the appointments are made not by Governments but apparently by Reserve Bank or other financial institutions. The majority of the Directors are nominee of the U.S.A. The Fund can compel nations to accept loans in terms of money but there is no power to compel a creditor nation to accept payment in goods or services. Debts can be repaid only in money, and if a debtor nation cannot sell its goods or services for money the Fund will endeavour to arrange further loans to avoid default. The prospect is of hopeless and irredeemable debt and the loss of a debtor nation’s fixed assets. It is provided that'if any attempt is made to escape when once in, all other member nations are to exercise sanctions against the escapee. Invitation of the spider to the fly. Once in, the only way out is through world-wide revolution;.

2. Imperial Effects: Preferential trading between constituent members of Empire as provided in the Ottawa Agreement abolished. General effect to flood Empire countries with surplus products of U.S.A. and, when the Fund adopts a deflationary monetary- policy, to enable the U.S.A. to export its unemployment problem to Empire and other countries. Perhaps some of the worst effects of the foregoing might be minimised by an expansion of bulk purchase and import selection by the Governments of the Empire countries.

3. National Effects: The value of the money unit in New' Zealand would be determined by the Fund. The New Zealand Government would lose its right of control of the exchange rate. The price obtainable for its exports and its internal economy would be decided ultimately by the Fund.

Officials of the Fund temporarily or permanently resident in New Zealand are placed beyond the laws of New Zealand and are not liable for rates, taxes or any infringement of the laws of the country. This immunity is extended to cover their official property, private effects, and dependents.

4. Effects on Individual Farmer: Some of the goods, implements, tools etc. that he requires from overseas might be obtainable at reduced cost, but his income from exports would be precarious and might disappear altogether.

The enforced . competition of all counti’ies, including the U.S.A., producing commodities similar to those

exported by New Zealand, must become increasingly fierce in the effort to obtain Fund money. Great Britain could be forced by the Fund to take the whole or the major part of imports of meat, dairy produce, etc., from the U.S.A. or such other country as the Fund might direct.

Farmers would be well advised to follow Mr S. Holland’s lead and refuse to agree to the proopsition until it is better understood in all its ramifications and until such amendments are made as will enable the Fund to fit into the requirements of a democratic form of Government.