EXCHANGE PROBLEM.

Hawera Star, Volume XLVIII, 21 November 1924, Page 5

EXCHANGE PROBLEM.

REDUCING INVISIBLE EXPORTS

tBY TELEGRAPH—PRESS ASSOCIATION.) WANGANUI, Nov. 20. A paper oil the exchange rates operating between London and New Zealand was- read at the Chambers of Commerce conference to-day by Mr. J. T. Martin (Wellington), the' main features being a consideration of the various factors influencing the rate movements, including the importation and exportation of goods. Government and public bodies borrowing, and investments in bills. Reference was made to the increasing value of our exports accentuating rather than relieving the high rate of exchange, and the necessity for the Government and public bodies to reduce the invisible exports by refraining from borrowing on the London market for the next two years, the total borrowing of local bodies on London being £20,000,000 in the last ten years. The Darling scheme, which was sul>mitted to the Economic Conference, was outlined, showing how to render mobile the £2l 000,000 of gold held by Australian banks by using this money as a basis for the establishment of currency bills in Australia and gold bills Jn London. Gold_ cannot be placed in circulation while its intrinsic value exceeds its currency value. Reference was also made to the Knglish-Egvptian scheme, which received such favourable comment at the Imperial Conference, and which for ten years has' worked successfully between England, and Egypt. This scheme involves the placing in London of a fund in the form of negotiable securities. When required sterling could be raised in London or currency in the Dominions The virtue of the scheme is that it operates beneficially during the height of tlie exporting season, the currencv automatically retiring itself wkeu the economic demand is satisfied.