RURAL MEMBERS' VIEW

Evening Post, Volume CXIV, Issue 122, 19 November 1932, Page 14

RURAL MEMBERS' VIEW

ONLY EFFECTIVE WAY

APPEAL TO CABINET

The viewpoint of those members of the Government who waited on Cabinet last Wednesday evening with a request that the exchange rate should be increased' to 25-pei- cent, as the only effective way of helping the pastoral industry of the Dominion out of its present troubles. was. outlined by the Hon. A. D. McLeod in an interview. He also released the text of the statement read by him to Ministers on behalf of the deputation.

Mi-. MeLeod said that more than a week ago Messrs, J. Hargest, T. D. Burnett, H. M. Campbell, K. S. Williams, and himself had' had' a ' conversation ' with' the Prime Minister- in the lobby, and had told him there was a danger of a debate being forced on the floor of the House concerning the serious position of primary producers. It was suggested to the Prime Minister that it should be possible to give relief by increasing the exchange rate. "We assured Mr. Forbes that we were not in sympathy with such a move," Mr. McLeod added, "but we said that if a debate did take place many of us would be placed off-side with our constituents if we did. not take part. Mr. Forbes thanked us for mentioning the matter to him, and he told us frankly that the Government'was gravely concerned about the position of farmers in general, and, through them, the position of all sections of the community. He concluded by suggesting that we interview the general manager of the Bank of New Zealand and hear his views, as tho Government's banker, on the farmers' problems. POSSIBILITY OF BONUSES. "We did so, but beyond discussing the possibility' of bonuses, Sir Henry Buckleton declined to go into the exchange ' question, apart from any opinion which might bo held by his directors, which, of course, he was not in, a position to discuss. This was followed, as is now generally known, by the deputation which waited on the Prime Minister and Cabinet on Wednesday evening last."

Continuing, Mr. McLeod said he had not looked for any prominence in that deputation, but the Eeform group of the deputation requested him. to act as their spokesman; This he consented to do, but only by way of a written statement which had previously been approved. He" assured the Prime Minister that the deputation had no desire to embarrass the Government in any way. He then read the prepared statement as follows:—

"This deputation represents some thirty supporters of the Coalition, apart from members of the Cabinet, who daily are becoming more perturbed as to the serious position of this country's foundation industry—namely, its great pastoral industry. By its pastoral industry, wo mean the industry which in meat, wool, dairy produce, and by-pro-ducts is responsible for more than. 95 per cent, of New Zealand's total exports. We feel that if something is not immediately attempted here in New Zealand to bring price levels of pastoral products more in lino with costs directly or indirectly borne by the pastoral industry, in the shape of wages, interest, and other costs, the end of the present exporting, season is going to find the vast majority of pastoral producers insolvent and the economic position of this country seriously jeopardised. RESULT OF INACTION. "We recognise to the full the difficulties of the Government, and this deputation has no wish to add to those difficulties. We, however,- honestly, feel that unless some further earnest and determined attempt is made by the Government to restore a degree pf equilibrium to this, country's internal price levels, the national results before next winter is over will be far from pleasant. "We feel that an adjustment in the internal price level can be brought about only in one- of three ways:— 1. By further drastic cuts in wages and interest. 2. By payment of substantial subsidies to those in the pastoral industry. • ■ . 3. By further raising the exchange ■ against sterling through exports.

"We,do not urge further drastic cuts, more especially in wages, and we cannot support subsidies if provided from borrowed moneys. We do, however, believe . that much can be accomplished toward all-round relief by a raising of exchange to at least 25 per cent, over sterling, and we feel that every effort should be made toward getting the trading banks of New Zealand to adopt such a policy.

"We confess to having no clear idea as yet as to what is chiefly aimed at in the setting up of a Central Bank. If one of the chief aims is to bring New Zealand currency to a par with sterling as early a~s possible, then we believe that a very grave risk is being taken. However, the necessity for the Government attempting something on behalf of the pastoral industry is exceedingly urgent, and this is the only reason for so large a deputation of members waiting upon you as Prime Minister of New Zealand."

On behalf of the United members of the deputation, Mr. C. H. Clinkard then expressed his views briefly.

MATTER FOR THE BANKS.

Mr. McLcod said that in replying to tho deputation, Mr. Forbes • and Mr. Coates both definitely stated that the moving up or down of the exchange was not a matter for the Government's decision, but for the decision of the banks, They both, however, went on to say that the banks, if doing their duty, could not divest themselves of a national responsibility which was almost as great as the responsibility of the Government. .

They both were as genuinely perturb-, ed, they said, as members'of the deputation concerning the serious position which had arisen regarding the country's exports, and they sincerely thanked the deputation for so frankly putting its views before them. After a few minutes' chat regarding central bank proposals and the danger arising of the need for a general moratorium, the deputation thanked the Prime Minister and withdrew.

In justice to Mr. Endean, continued Mr. McLeod, it should be stated that he took no part in organising the deputation to the Prime Minister, but his anxiety for the primary producers and the country generally under.the present deplorable conditions was well known. On Wednesday last, however, he sent the following cablegram to the general manager of one of tho largest importing as well as manufacturing firms in the Commonwealth:—

"Hag high rate of exchange been to the benefit of Australia?" The reply received was, as follows:-—"Definitely yes. Initial immediate benefit to export producer ultimately reflected, stabilised

price levels, increased purchasing power. General benefits high exchange now recognised. Difference opinion now only whether present rate should be increased."