THE EXCHANGE.

Evening Star, Issue 22463, 7 October 1936, Page 13

THE EXCHANGE.

TO TUB EDITOR. Sir, —lii to-night’s ‘ Star ’ Mr Martin (Wellington) is reported to have said that the prices New Zealand was receiving, even to-day, in Britain, were such that she could not carry on without the exchange. Wo would be obliged to reduce out; importations to a very serious extent. I maintain that New Zealand as a whole, neither gains nor loses one penny as a result of exchange manipulation. Our exports are paid for in British money, which creates our exchange funds. The mere fact of adding 25 per cent, to that money when it is transferred to New Zealand does not in any way benefit New Zealand as a whole. I cannot see why we would have to reduce our importations if the exchange was taken off. The importer, instead of having to pay 25s for every 20s worth of goods imported from Britain, would only have to pay 20s, New Zealand money, for every 20s worth' of British goods imported. Surely that would have the effect of increasing our importations and using some of the £.‘10,000,000 of exchange that the Reserve and other banks have lying in Britain at the present time. The mere fact ,of New Zealand having so much exchange in Britain is proof that she has not been importing as much as she ought to, and I feel certain that the high exchange is in a measure responsible for this state of affairs. No nation, if it is playing the game, has a right to export more than is necessary to pay for its visible and invisible imports. The (Sooner the nations of the world realise this, the better it will be for all concerned.—l am, etc., October 7, - M‘o.