EXCHANGE PROBLEM

Hokitika Guardian, 24 July 1923, Page 4

EXCHANGE PROBLEM

-RATES WITHIN THK KMITHI-

I.ON HON, July -20

A high financial authority who is int civs ted in Australian affairs, calls attention in tile Press to* the question of exchange rates within the Kntjiire. He says it is now an aiticle of faith with British statesmen tlial Empire tratio sliould lie encouraged by every possible legitimate means, but in one direction nothin'; lias been attempted. India lias a rupee eiirrency, Canada 1 lie dollar, >.nd Australia New Zealand and South. Africa, the pound is their currency. In tin 1 ease of foreign countries the daily 11 net lint ions in tile value of the exchanges are readily available to the man in (he street, hut in tile cr-c ■ f the Ht-iti-.il Dominions they arc 1 111 n]ietl together. Ihe great 'litlei core w hicli tee hanks create between the iiuyiu!' and selling rates, over and above He- legitimate charge lor interest by banks in financing iransaetiims, coiisj ituiex a levy on trade with the southern Dominions. The average business man would think the variation i.f tin- Dimiiiiiuii exchange nites might he i-aii'eil by daily, weekly, monthly, or perhaps none part iriikirly, by seasonal llileluat inns of trade. This is ineorreri extent possibly in tile broadest sense. The present rates I’m-cubic transfers were fixed by a circular from the combined Australian banks issued ill November. lII2‘J. No one would suggest that the balance of imposts and exports from Australia, and New Zealand to England, or vice versa,, have remained unvaried since November. ll'Z'J. It can lie stated tliai the charge for exchange is entirely icgulnted by the banks controlling trade with Australia and New Zealand. lively single bank engaged ill ihis trade is in the combine. They jointly regulate the exchange charge at what seems good to their eves.

Stated broadly, tile bank charge for remittanees to foreign eomttries does nut, exceed half :i crown per cent. Loth ways, yet the bank combine <<mt ' <’ll i!i;- i-"lit lam i.- t" and from \n' - India and New Zealand charges thirl y six shillings per cent, it stabilises the exchange —at a price. This matter lines not concern only the merchants and manul'acl yrers ami ol lie's engaged in thi' Ae-tmlia.ii and New Zealand trades. They sim(ily pass mi the charge as an unavoidable expense. ft niinmiils to £) 1,000,000 a year, and eoinerns every man alld unman in bngland who wears eliitbes made from Australian or New Zealand wools, nr who cals the products ol those Dominions, ft specially concerns every raiser of Canterbury lamb, mutton. and beef, and every producer of New Zealand and Australian butter and wheat. We all emit'riiuite unwillingly in it.

The writer, without posing as ;m expert, believes that the adoption el mi Rmj) i ri' currency bill would undoubtedly stabilise the exchange. tend to mil in lii i n it nt purity, end iodine the blinks' charge to n competitive lute. The present position simply menus that there is no freedom in the exchange, excessive charges in normal times, and .1 menn-re id' dimmer in times of stress. Tile writer eoueludcs: “L* the t ■ nillionwenltli siitisl’ied Unit the Commonwealth Hunk should remain in the eomhine of Ausuidnsinn hanks? What does .Mr Ttruee say 't N the Now Zealand flovnernmeiit. content that the Bank ot New Zealand, in which is is a large .sliareholdor. should remain in the eomhine levying, an excessive toll?- What does .Massey say ?"