CONFIDENT PREDICTION

Hokitika Guardian, 26 November 1932, Page 8

CONFIDENT PREDICTION

BANK ATTITUDE. WELLINGTON, November 22. - In the light of the developments of the last twenty-iour hours independent of the high exchange co.itroveisy are now prepared to predict With confidence that, notwithstanding earner forecasts that an alteration wouiu be made at the end of the currant week, the outcome cf the agitation will ne a victory for those who luve opposed the manipulation of excnange. “The banks will not increase the rale, alter all” is the definite statement made in well-informed circles.

Following hard on the widely expressed lear that political persuasion would he applied to the Bank of New Zealand these prognostications give to the situation a turn as dramatic as was the original development. On every occasion on which the Prime Minister has referred to the subject publit'ly het has insisted that the re-, sponsibility for exchange rates rested with the banks and that the matter was one entirely outside the Government or political intervention. While defending the Government’s rigiit to consult its directors on the Bank oi New Zealand at any time on questions of national pol.ey he lias categorically denied suggestions that an. attempt has been made to influence the directorate ’on the present issue. “The Government is not bringing' pressure to bear on the bank,” he repeated this evening, when the point received incidental mention during the discussion of another subject.

In the city the feeling is that the banks have already answered the Government’s statement that the responsibility rests with them, declining to budge from the contention that the adoption of a bounty scheme is the proper method of. assisting the farmer in! his plight. The’Government, of course, is openly hostile to the bonus proposal and adheres to its refusal to entertain it.

If, as is predicted by those most intimately acquainted With developments, the banks refuse point blank to inteffer l with exchange rates a position of stalemate ! will. rise. What then .will be the next move? This is a -question that is now going the Parliamentary rounds, and in tlidse circles it is suggested that the agrarian interests responsible for the agitation for artificially high pegged exchange will be! obliged to take stock of their position before nay further plan of action ic considered. It is admitted that one unfortunate result of the skirmish has been to create 1 an open breach between town and country interest, which may have its clearest reflection on the' floor of the'House when the Central Reserve Bank legislation is under consideration. 1