STRONG OPPOSITION

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

STRONG OPPOSITION

ASSOCIATED CHAMBERS

EFFECT UPON BUSINESS

The disastrous effect upon business if. the exchange rate were fixed at an artificially high level was pointed out by Mr. A. S. Burgess, of Wanganui, president of the Associated Chambers of Commerce. Mr. Burgess said that the Associated Chambers of Commerce viewed with the greatest alarm, the pre. sent determined agitation to peg the rate of exchange high, ana strongly urged the Government and tho banks to resist the pressure that was 'being exerted to bring this about. It would be a calamity if tho agitation, were successful.

"My association long ago declared as its considered opinion that the rate of. exchange should be permitted to find its own level in accordance with supply and demand," continued Mr. Burgess. -"The association steadfastly adheres to that view, and is definitely opposed to the artificial pegging of the exchange rate, whether at a high or a low level. Supply and demand at the present time do not in the least justifya rate in .excess of 10 per cent. —if indeed they justify a rate as high as that —and to artificially peg the rate high is inflation.

"Such a step as proposed would have a disastrous ■ effect on business. Large firms have already stated it will mean they will have to dismiss perhaps half their staffs, and close up branches. Many concerns may be wiped out/altogether. There will be serious losses throughout business, heavy additions to the unemployed, and no slight increase in the cost of living. The very class that is seeking to benefit—namely, the producers—will meet a reaction in that the price of all commodities will rise, so that the exchange bonus they receive with one hand they will pay out again with the other. '

"Moreover, the pegging of the rate high would be a grave breach of the agreement made at Ottawa, as it would have the effect of increasing the duty and placing a restriction on British industry."