The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, DECEMBER 29, 1931. CONTROL OF EXCHANGE.

Hokitika Guardian, 29 December 1931, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. TUESDAY, DECEMBER 29, 1931. CONTROL OF EXCHANGE.

The Prime Minister’s announcement on Christmas Eve that the Government frour tlid : Ist. January was to take over the control of the monetary exchange, and that exports were to be licensed, was not pleasant reading. It emphasised the reality of the financial stringency and the difficulties of the Government in meeting its overseas obligations. When the Government went on the market recently to raise money to meet renewals of loans, it had to pay £6 3s 4d per cent, for the accommodation. This i s the dearest money' New Zealand has had to find, and was proof positive of the state of world finance. Mr Forbes in his extended statement, plainly indicates that the control of exchange is for the benefit of exporters, without lose to them on the advantage of the high rate of exchange. It will probably not be so favourable to importers who will find credit at Home absorbed in the main for New -Zealand Government .business. It is of significance that the banks operating in New Zealand are at one with the Government, and will pool exchange business for the facility of Government financial operations. This shows something more than a readiness to meet Government credit—an anxiety in fact, and because of that the situation' is not to he made light -of. The Government realises apparently that this new move will affect imports, and that will be reflected in the loss of customs’ duties. This is expected to add new difficulties to the situation, and there is a move to set up another* Economy 'Commission immediately after the 'New Year opens. We take it that this will not be a Departmental Committee nor a Parliamentary nor Cabinet Committee, which have already attempted to digest the public finance, but a committee of accountants and trained business administrators who will regard the position impartially. The outlook i« not agreeable to contemplate. It may he accepted that there will he more retrenchment probably of a character more severe than that which has gone before.,. It is a ease juuVj finally of setting'the house in order, and the action must have farreaching effect. It will hot be a matter for Government Departments only, hut for local and private companies and business organisations generally. The whole question of trade and commerce will come up for review. It appears to be an inevitable outcome of the world situation. The financial straits of great institutions are very apparent. We see it in the Old World and in the New. The plight of the United States with all its hoarded wealth and great institutions, is very apparent, and it may be worse relatively than our own country. The pinch and the stringency such as is apparent in some of the older countries of the world, have not been experienced here as yet, and it is well in case we should be submerged by the wave of financial stringency rolling round the world, that the country should go out and meet its difficulties, not wait for them to arrive. We take it this is the precautionary move of the Government. The , situation i« ' realised in all its seriousness, and is being faced as it .should he, boldly , and with a determination to win through. We hope and trust the plans which are being laid will meet the grave situation adequately, and in that objective the Government will have the best wishes of the community.