ADVANTAGES AND DANGERS OF APPRECIATION

Chronicle (Levin), 21 August 1948, Page 5

ADVANTAGES AND DANGERS OF APPRECIATION

Received Friday, 7.10 p.m. LONDON, Augu&t 20. The Times, in an editorial, says: "There is perhaps some cause for the appreciation when it is rCmembered hovv first Sweden, t(ien Canada, were eucouraged by - big- f'ayourable trade balancps to check riging internal prices by revaluing their eUrreneies upwards, and yet within a shorf time foun,d themselves as- a result in difficulties witli their trade balances. Tlie dangers whicli ultimately revealed ' themselves to Sweden and Canada" are naturally altogetlier absent in New Zealand, but New Zealand is less vulnerable and she is not at the momertt ifi danger of incurring a dange.rous dollar deficit. I11deed the preponder-ant part of her iiiiports cotnps. from the sterling area. '"A big upward -revaluation of u eurrency is always risky, but it may well: be within New Zealand 's capacity to carry./it off ' without ill ed'ects. The change will heip the cons.iuner at homo, and abroad the achipveruent of parity between tlie Don\i,iiioii pourtd and sterling is in itself ■ general ly desired. "Neither New- Zealand nor Australia has ever been quite- reconciled to- 'the (dea o,f thoir po.und standing at a discount against the pound sterling when fiindamenthlly 'the respective pounds should mean one and, the same thing. Accordingly, it would take a great dea! to induce New Zealand to retra.ee (he ttep slie took yesterday, and equally it may take a great deal to prevent her example from spreading.