NO POLITICS

Evening Post, Volume CXIV, Issue 125, 23 November 1932, Page 8

NO POLITICS

COMMERCIAL STAND

LAWOF SUPPLY AND DEMAND

The attitude' of the .Chamber of Commerce upon the exchange question was discussed for more than an. hour by the council of the chamber yesterday afternoon, but whether the rate should remain as it is or should be raised, or whether a bonus system should be introduced, was not decided. The council, however, maintained a definite stand that the rate of exchange should not be influenced by political action, but should be dictated entirely by the law of supply and demand. '• •

The president, Mr. J. P. Luke, referred to previous discussions among members of the council, and to the impossibility of arriving at a unanimous decision, so diverse were the interests represented on. the chamber, but, he said, he had no hesitation in stating that his own view was that no attempt should be made to interfere with the rate of exchange as dictated by natural conditions. -Nothing had transpired since the last discussions among members to lead the banks or anyone else to Taise the Tate of.exchange, particularly in view of the very large favourable trading balance at. present. If a meeting of members was called and unanimity could not be reached, they would simply, be beating the air with any resolution'they might draw up.for presentation to the Government or anyone else, just as had happened, in fact, previously. .' . ■'

Mr. D. J. McGowan: I think that wo would probably get a unanimous decision of the council now upon the ex-, change question. Mr. M. G. C. McCaul said that whether'members of' the council 'favoured or opposed higher' exchange, they would recognise that the attitude taken' by the president in maintaining that'the rate should be kept free from Government interference,'was correct. He moved:— - '. : ' * ■ ' That the ,: council', endorses the . action of the president in maintaining that the rate of exchange should not be influenced by political action, but should be dictated entirely by the laws of supply and demand. TO CLARIFY IDEAS. • Mr. McCauV suggested that a meoting of the chamber, should be called at which all interests affected could express, their views. It was obvious and inevitable that there should be differences of opinion, but from a full discussion members could judge the position better, and would possibly realise that their own views would not stand criticism. Such a discussion, he believed, would bo of real educative value, not only to members, but to the public. No 'motion need bo passed; what was really wanted was a clarification of ideas. . ■ Mr. A. J. Curtis said that he thought the chamber should have jumped into the breach- right away. The chamber should be the body from which expressions of opinion regarding the business of the community should come. The executive should have been called together and all sides of the question discussed. Surely it was broadminded enough to give valuable guidance as to the wishes of the people. His personal view was that though pegging the exchange might benefit a section of the community at the ..loment,' it was going to act very detrimentally upon the other section. ■ Mr. McCaul repeated that the chairman- had taken the only possible course, of holding that the Government should keep its hands off exchange, f. Considerable discussion then followed upon a proposal that a general meeting of the chamber should now be called. The chairman said he did not think that they could get any further, for nothing had occurred to change the position in the last few. months. He certainly did not want to be put in the same position again of having to place before the Government a resolution so cut down as to be absolutely innocuous. There was no question that the exchange question had brought about a. definite cleavage between those engaged in business activities and those in primary producing. Mr. Curtis said that what was really wanted was an inquiry into the causes which had brought about such a condi-i tion of things that the. proposal of a higher exchange need be raised at-all; I what were the root causes of the present situation?

Mr. Luke: The exchange question has its origin in some cause the reason for which we do not understand?

Mr. Curtis agreed, and said he believed that though a higlier. exchange

might benefit one section, there was a danger of repercussion, with worse results in tho end. : POSITION MOST SERIOUS. The reason for the present agitation for higher exchange, said Mr. McGowan, was simply that the country was in such a state that action of some kind had to be taken to get the farmer out of the hole he was in, but to impose a penalty of -25 or 30 per cent, oirone class to relieve the other would lead to a still worse position in twelve months' time. Yet .he did not think it would be of any use crying out against exchange unless sometiling else was suggested, for the obvious fact was that something had to be dont; 92 per cent, of the national income came from the land. For his part he favoured the bonus poroposal, or possibly a poundage system on local consumption. Things were so bad with the business community that a 25 per cent, exchange would close many businesses in the. city overnight. The position was not the same today as it was three months ago, said Mr. W. B. 'Matheson; it was yeiy much worse. It had been suggested, that the agitation for higher exchange was instituted largely by those who wished to save their investments in farms from the wreck. He had always contended that exchange should be determined by the London market, but he felt also that in the present crisis he and other ■ laymen were helpless in that they did not know enough. The question was one for experts, and the responsibility, he believed, lay upon the Government, which coald call upon any experts. He thought that ' the whole position could have been saved twelve months ago had they only demanded freedom of* contract in all transactions. Mr. Curtis: In other words, you mean deflation. Mr. Matheson: Deflation, inflation, and all the other "nations" I don't pretend to understand. TOWN AND COUNTRY. Mr. Matheson thought.a general discussion would be of value, even if it only compelled them to realise their lack. of knowledge. The farmer was getting less than a city labourer, and what would happen if the farmer gave up and came to town? It would be wiser for the communit}' to give something out of wages or capital to keep him going, for if the farmer collapsed, then all "would collapse. ■_ Mr. Luke: That's a very wide question, and I'm not prepared to take up the cudgels at the moment, but I will say that it is a very old fallacy in New Zealand that the fanner keeps the city. The farmer has never done that, and he never will do so. ■ Mr. Luke expressed the opinion that the real reason for to-day's troubles lay in the Industrial Conciliation and Arbitration Act, for ■ every cost was eventually a wages cost. ' After more discussion, the resolution moved by Mr. McCaul endorsing the president's attitude was unanimously adopted, and it was also decided that the chamber could not take part in a.ny public meeting that might be called by the importers, except to the extent of maintaining that there should be no political ■ interference with exchange. The meeting also approved of the idea of a general meeting,of Chambers of Commerce members for a discussion upon the widest basis, and it was proposed that the president should invite the Hon. A. D. McLeod to address members.