POLITICAL

Hokitika Guardian, 30 November 1932, Page 8

POLITICAL

THE EXCHANGE ISSUE.

MEMBERS’ OPINIONS. WELLINGTON, November .28-. Although it i s 'difficult to estimate the possible political consequences of the 'bank’s decision on. the exchange question, it is:,not disguised in the lobbies that difficulties have arisen, for there are two definite bodies « of opinion within .the ranks of th e Government. .. '• ? j The statement wn« vnade in the lobI bie s that those members seeking exchange'inflation would not be content with the position if the banks,'.as a whole: decided against anyincrease in the rate, and the question h,as been . raised among these members as to i whether steps should be > taken to j jattempt to force the hand of the Gov- | ernment in spite of the.:Prime Miri- ! aster’s statement that Cabinet would j accept the banks' verdict. As a major- | ity of the Government members, and I also a majority of the Cabinet, favours a hi'di “rate, the outlook i s admittedly complicated. ! On the other hand, there are those who onpo-e a hi'rh rate and who state that they will not hesitate to take drastic steps to impress the Government with the : r 'conviction that .somethin" mlust be done fof the primary producers. Mi; T. D. Burnett, Government member for Temuka, who, however, favours a high'rate, has gone as far as to state puhlidly that he will, decline to sit in-Parliament.any longer unless some action is taken.,to strengthen the .position of the farmers. POLITICAL ASPECT. It is generally conceded by members in Well'ngton that the banks’ decision makes the question of assisting the primary producer entirely political, and that the repercussions mav be >eri-' 'll’” for the Government unless it is ‘ aide to devise a scheme which will retain for it the allegiance of'almost the whole of it s following of 50 members. T " view of the widely divergent opmtorls. expressed by Coalition members j since the exchange controversy began nine days ago, Cabinet’s task is one of extreme delicacy. . i It is certain that there will be no safety in inaction. .Such a policy • would almost inevitably lose to the '■ Government the'support of the 25 mern-x 'hers who signed the memorial, asking that political pressure should be placed on the bank£ to .secure the raisin' 1 of the exchange rate to 25 per cent, above parity. By signing a counter- ; memorial at least six members of the Coalition have .pledged their resistance to any manipulation of the exchange rate. ’ . NEW ALTERNATIVES. The bank’s other proposals that the Government should consider paying rates due by farmers to ‘ local •budie* ; and waive ite claim‘ for land tax tbit j ear are palliatives which have noa previously been • discussed publicly. However, the belief was expressed by one prominent Government supporter, who represents a scattered rural eonst.tuency, that the former plan was unilTtcly to be favourably considered by Cabinet, although he thought it possible serious consideration might bt g.ven to land tax suggestion. • No one wag greatly surprised by th; bank’s decision. Even those who have taken t)ie most prominent part in th-' exchange-inflation agitation were- far’ from 'Sanguine that their views would commend themselves to the bank directors. They seemed todiave pinned'then' main hope to the possibility' that th' Governrnont would take an active part in persuading the banks that the I'ais ing of the exchange rate -was essential j if the farmer were to be saved. OUTLOOK TN PARLIAMENT. ■; i When the Prime Minister indicated that the Government would play only a passive role, the prospects of the high exchange advocates carrying the J day began perceptibly to diminish, al- ‘ though, on the other hand, the Parlia- ! mentary group holding the opposite view wa R never thoroughly 'confident of the outcome. Nevertheless, its confi' ] dence grew perceptibly during the past i two days. However, ae one member 1 who signed the counter-memorial re- 1 marked last evening: “I d onot expect i our little gesture had real influence in 1 determining the is'ue.” 1 It is premature to make definite as- 1 sertions regarding the political coiise- 1 quences of yesterday’s decision by tlie I Bank of New Zealand. However, mem- * bers of Cabinet do not minimise th n ’ Bilious issues involved, and frankly I confe”s that the present situation ha: in it disturbing elements. Much, there. ! fore, depends on th?;. policy .evolved by 1 Cabinet within the uqst, few days to ( meet the crisis. : j... ——————