HIGH EXCHANGE

Evening Post, Volume CXV, Issue 72, 27 March 1933, Page 6

HIGH EXCHANGE

(To the Editor.)

Sir,—A review of our high exchange system and the effects of it As,' in my humble opinion, ■ fully warranted.' I daresay by now that most of your readers are well acquainted with, the bad effects of the high exchange, on living costs, unemployment and industry. Is "it true -that the only people who have gained a financial advantage from the high exchange rates are the importers? I understand that the present stocks of some two hundred or more have -been listed so that each of these big importing firms know exactly the total amount of stocks available. 1 hey have organised a system of exchange in stocks, whereby it will not be necessary to import very much for the .next two years. And although suffering reduced trade due" to high exhange rates, they are receiving from the general public 15 per cent, advance on all stocks that they had in hand. No wonder the Customs revenue dwindled, and I .think the public who are being made to pay should be made fully affljuainted with the actual position.—l am, etc., ,

C. GRAYNDLER,

"As president of the New Zealand Importers' Federation I have no knowledge of any combination of importers as outlined by your correspondent," said Mr. Edwin Salmond, when the above letter was referred to him. "It is absurd to say that there are sufficient stocks in the country in .anything but a few lines to last for two years, and anyone who has studied the imports for the last two years will reuliso this. At the same time, if any importers are lucky enough to be able to collect the extra 15 per cent., they are entitled to it, because, when the exchange tumbles, as it is bound to do through force of circumstances, these same importers will be caught with stocks on which 25 per cent, exchange has been collected, and they will be forced to sell at a loss. The importer who makes an extra 25 per cent, on stock which he held before the extra 15 per cent, was imposed will, if he is wise, put such increased profit in a. reserve account to be used for the purpose of offsetting losses when the exchange falls later on. Owing to the severity of competition at the present time, it is unlikely that any firm is in a position to take advantage of. the exchange position." .