EXCHANGE RATE

Hokitika Guardian, 15 March 1932, Page 3

EXCHANGE RATE

NO INTERFERENCE ASSURED.

CREDITS POOL RETAINED

WELLINGTON, March 11

The Government’s decision to retain the exchange credits pool and not interfere with the rate of exchange was announced in the House this afternoon by the Minister of Finance, the Hon. W. Downie Stewart, replying to a question from Mr C. A. Wilkinson (Independent, Egmont). “I am fully alive to the fact that the exchange question is causing much concern to mercantile firms and pthers,” said the Minister. “It'is for this reason that the Government has given much time to consideration or every aspect of the problem, and has made repeated efforts to bring about an agreement between all interested parties. So far, however, these efforts have not been successful and, in any case, before any alteration in the present arrangements can be made, the concurrence must be obtained of the London interests which undertook certain obligations on behalf of the Dominion on the faith of the arrangements made in New Zealand to meet an overseas emergency.

A PRECAUTIONARY MEASURE. “In recent times many Governments have found it necessary to take control of exchanges in much the same way as the New Zealand Govrnment found it necessary to create an exchange pool owing to a sudden emergency arising in the London money market. The pool was created, not for the purpose of keeping down the exchange rate, but as a precautionary measure to see that adequate funds could be purchased for Government requirements and that all exchange credits were conserved and used in the best interests of the Dominion of New Zealand.

“In a national emergency of tfiis nature, national requirements must take precedence over private or sectional interests, and some measure of restriction on individual freedom must inevitably be accepted in the public welfare. Conditions in the London money market are improving rapidly, and if the present favourable tendency continues the Government may, in due course, find it possible to get some relief from the stringent conditions ■which rendered necessary the . formation qf the exchange pool. In tilts event reconsideration of the present conditions imposed in New Zealand will be possible, and I can assure the House that the regulations will not be maintained any longer than is necessary to ensure Government requirements being met.

NO ALTERATIONS. “I may say that the Government does not propose to interfere with the rate of exchange and in the meantime does not consider it advisable to make any. alterations, in the regulations for affecting the pooling of exchange resources.