The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, SEPTEMBER 17, 1931. EXCHANGE RATES.

Hokitika Guardian, 17 September 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, SEPTEMBER 17, 1931. EXCHANGE RATES.

Whilk there has been no confirmation of the report, which created a great deal of perturbation, in commercial circles oil.Saturday,' of an increase m ihe"exchange rate on London, accompanied by a,, decrease in the rate on Australia, the ..impression seems, .to prevail,.. comments a southern, writer, that the intimation was premature only and that it may be followed in a‘few days by an official announcement of a change in the rates of the nature that has been indicated. Economists have explained the influences that regulate the movements in the «. change rates without having, perhaps, conveyed conviction to the minds of more than a comparatively small minority in the community respecting the precise bearing which these influences have on the rates. No one, however can be insensible to the effect which the. movement in the rates has on trade and commerce. It is obvious that if tiie rate on London is increased nt...one stroke from 10 per cent, to V. per eent.. .the immediate effect , must be to curtail, importations. Already the fall in .imports to the Dominion, im reflection of the diminution of the pur. chasing power of the people, has been; so .very marked as to- upset seriously .the ■ calculations,, of the Government with respect to the revenue that would be derived > in the current financial year from Customs' duties. During the -••quarter ended' on June 30- last 'the value of the imports was £4,927,131 below that for' the corresponding quarter last year, and for the twelve months ended on the same date the drop in imports was £15,454,401 in comparison With ' the preceding twelve • monts. But importations will be subjected to still further restrictions and be confined as far as possible to absolute necessaries if the exchange rate on London is to lie doubled. On the other hand the primary producers of flie Domiiiion will benefit to the extent of the amount of the rate, and the fact that this will be the effect of a movement of the nature that .is said to be in contemplation, may be ret garded a.s a probable explanation of any increase that may be made in tlie rate. Since the economic position’ l of the country is so largely dependant on the results of the operations of the farming community, which nrovide 80 per cent, of the whole of the exports of New Zealand, a movement in the exchange rate that would be advantageous to the producers is of.obvious importance.