HIGHER EXCHANGE

Hokitika Guardian, 18 January 1933, Page 6

HIGHER EXCHANGE

MOVE MADE BY FARMERS’ . UNIONS.

LOWER. TARIFFS ADVOCATED.

(Pe Press Association — Copyright.)

WEI .(LINGTON , Jan uary 17

Economic problems facing til© conn-, try in genera.!, and the forming community in particular, were discussed at a meeting arranged by the Farmers’ Union, to which invitations were extended to the repreuemtatives of other sections of the community.- Commercial interests were represented, and several members of Parhaiu.ent, including four Labour representatives were. pru.ent,

Air Poison, in the opening address, said it was their object to help the Government, which was distracted by many grave cliffiealt.es, and had ah clas.es of the. community to consider. Any plan they might evolve should be of benefit to the' community as a whole. The farmers did not wish to suggest that any section should he upood-fed. Good times Intel created a psychology resulting in undue extravagance. lie believed it to bo neeessaiy to undertake, further econoin.es in New Zealand, and that further economies were possible. He thought it would he generally agreed that farmers’Lad played their part during the depression, and- to a remarkable ext.nt had endeavoured to counter the decreased value of their own production.' At tlie same time, the farmers’ capital margin had disappeared in many cases, lie estimated that in the last few years, • farmers had lost the staggering stun of two hundred .million pounds. Many small farmers were living in want and destitution, hut their -plight was not generally known, because they wcie in the hack country. It was his belief that , people in the cities now realised their recovery and prosperity depended on the recovery and prosperity of the farming -community. It had to' be -remembered that any plan they doulid ■ evolve coukl only deal with internal conditions. They were- hopelessly unable to do anything to control external conditions. He suggested that there were four pvobtamc, that- could he dealt with, •viz:— First, the high interest rates; second, the crushing effect of high taxation; third, high costs; fourth, the reduced purchasing and expending power of tlia community. The first proposal submitted to the meeting wais that the exchange iate be raised to a. point at ‘least equal to that of Australian and Argentine competitors. • This was moved' hv Air James Begg, whose opinion; whs J ha,t, jsom ( q, ad van cement of the exchange was absolutely necessary. City values would inevitably come down to a degree equal to that of farming property. The only ]joj:e for city industries were a rertoration of purchasing power for the favining community. The raising of the rate of exchange to the Australian level would not put the t farmer on his , feet; but wonlld ho some help to him. It would lie only one of many necessary thing!.?, but would be a big factor. He was wholly in favour of free exchange, if they could get it, but free currency exchange pre-sup-pose-d free exchange of gc-ods and services. The process of rehabilitation must he accompanied by drastic reduction in costs, and probably furthei reduction in interest. Nothing would keep, interest down till the Government refrained from borrowing, and prevented local bodies from extravagant borrowing. The British Government had interfered.with the exchange, hut to , what extent he did not know. At any rate, it had put aside -a huge sum to keep the exchange where it wanted it. .

yir "\V. Machin seconded the motion. Mr It. E. Talbot (Hawke’s Bay) said the exchange question should have been decided 12 months ago. The bulk of the season’s ‘exports has passed from the producer to the exporter, and by the, time New Zealand could benefit, there would be another .export season in progress. Raising the exchange would .not solve the problem. The essential 1 tiling was to tackle cuiiencj and credit reform. Air Alelisop (Auckland) thought the Farmers’* Union should adhere to its former principle regarding free exchange, and .seek some monetary reform that would give reasonable help to- the man on the land. Mr Hall '(North. Canterbury) regretted the motion was not accompanied -by some reference to a central icservo bank. After further discussion, the motion was carried by 35 votes" to i. Mr Mellsop ‘moved that there should be an immediate and substantial reduction in our existing tariff rates, particularly with the 'Mother Country, and the rest of the Empire, and th' e policy of the Government should be to--effect gradual periodic reductions in tlioi-e. rates until Empire free trade is realised. Mr It,. S. Chadwick (Hawke’s Bay) seconded Air Mollsop’s motion. Mr Mclntosh (Canterbury) said that. New Zealand is under no obligation to take from Great Britain what she could manufacture herself. He pointed out that (substantial reduction in cur tariffs would he *a direct hit at our local industries. Air Bogg said that they had to get hack to a point where every industry could stand on its own feet, There was no reason why there should net bo •a substantial tariff reduction. It could go. done gradually. The elut es on British goods should be reduced until cheis was free trade ■ with Britain,

The motion was carried by a large majority. BUTTER, STABILISATION. PROPOSAL AGREED TO. AVEIJLINGTON, January 18, An unanimous vote in favour of the adoption of a scheme proposed by Air A. G. Sinclair, secretary and manager of To Awamutu Co-operative Dairy Coy. for tlie stabilisation, of butter prices on the local market, was passed at a meeting of the Farmers’ Union executive. Air Sinclair said the scheme suggested, commencing on the basis of competition for local market should be fine 1'.0.b. parity of export butter, and fortnightly adjustments should Le (made, in the local price, based on the average realisations of New Zealand butter oil the London market, during the previous fortnight. Dairy companies -price would bo f.o.b. parity, pj.is the cost of patting and d-is-' tribntion, and the whole industry should shared the additional revenue of £403,000, by the establishment of a fund into which each company would make monthly payments on the basis of two pence for each pound of butter sold locally, the fund to be divided at the end of -the season to every butter making company, in proportion to its total output. The scheme would involve the average household- in - an additional expenditure -of sixpence per, week.