STRONG PROTEST

Hokitika Guardian, 25 November 1932, Page 5

STRONG PROTEST

AGAINST EXCHANGE

MEMORIAL TO CABINET.

(Per Press Association — Copyright.) WELLINGTON, November 24. Claiming that their representations have the guai mteed supporc i.f twenty members of Parliament outside of the ranks of the Official Opposition, Coalitionists to-night presented a. signed memorial to Air Forbes and Mr Downie Stewart vehemently protesting against any political intervention in the exchange rate issue, and also pressing lor an early statement to allay the anxiety at present prevailing throughout the country. Tile text of the memorial is as follows :

“We, the undersigned Members of the House of Representatives, on behalf of some twenty odd members, who have expressed general agreement with this Memorial, wish to express our emphatic protest against the suggestion made to the Government that it should use its influence with the banks to increase the rate of exchange to an artificially high /level against New Zealand. We contend that, if such action is taken by the Government, it will fail in its objective of providing any effective measure of relief to the exporters, and will cause far-reaching and evil results to all of the other sections of the community.” “In support of these contentions, we respectively submit the following reasons:—

(1) It is in tile public interest that exchange should find its natural level as the 1 isi-s of the Dominion’s trade balance i_nd the law of supply and demand—m short, that there should be free exchange apart from political interference.

(2) An increase in the exchange rate to, say, 30 per cent., would, in effect, he equal to an additional customs tax on all imports—by roughly 20 per cent.; hut not one penny of additional revenue would accrue to the Dominion.

(3) Imports would substantially decrease, with a consequential reduction in the Customs revenue. This loss would have to be made good by other forms of taxation. (4) Trade and commerce would be ■further restricted; the international prices of good s would he raised; the cost of living would be increased; real wages, expressed in terms of purchasing power, would be decreased; and, as the result of lessened business, the unemployment problem would be intensified. ’ -■ v ■

(5) The spirit and letter of the Ottawa Agreement would be violated and the present go( 1 understanding between the Dominion and the Mother Country would be endangered, possibly to the detriment o £ our exporting farmers, njho enjoy ' 'aluable preferential privileges in ehe British, market. A major, feature of our objections lies in the fact that: (a) The rise in exchange, as proposed, would, of necessity, further seriously embarrass the finances of the Government, anff additional heavy taxation would have to be imposed upon our people, who are now at the limit of their resources with regard to taxation, (b) Local bodies in many cases where obligations are overseas would have to impose additional rates to make up exchange losses, or, as- an alternative, dismiss workers or reduce wages.’’ "In conclusion, we desire to call your attention to the Dominion’s favourable trade balance of £12,000,000 on the past ten months’ trading, with th major part of the export season yet to come. Additional reasons, as affecting the credit of the Dominion and welfare of our people might be advanced against exchange inflation, hut finally we would stress the necessity for all early and definite statement by the Government to allay the uncertainty and anxiety that have been aroused ('Signed') ,A. .T. Stallworthv. A. Harris, R. A. Wright, W. A. Veitch, H. Atmore, H. Holland, H. M. Rushworth, C. A. Wilkinson.