Hon. Downie Stewart

Hokitika Guardian, 19 January 1933, Page 5

Hon. Downie Stewart

RESIGNS FROM NEW ZEALAND CABINET

CONTROVERSY ON EXCHANGE QUESTION

MINISTERS DECLINE TO COMMENT

(Per Press Association — Co'jyright. )

WELLINGTON, January 18. There is a rumour of a big political crisis, which is causing great uneasiness in Wellington.

The report is that the Government has reversed its attitude on the exchange question, and has yielded, or is about to yield, to the demand for high exchange, and also that, after opposing this attitude, Hon. W. D. Stewart, Finance Minister, has tendered his resignation from the Government.

Although no official confirmation is given, it is believed that Mr Stewart has resigned as a member of the Ministry, being unab’e to subscribe to the programme of emergency measures which it is proposed to place before Parliament next week.

The Prime Minister, ■ Air G. W. Forbes, when interviewed, would make no comment on the political position, and lie declined to confirm or deny the report that Mr Downi e Stewart was resigning.

for the hanks, it is now stated, reliably, that the Government does noi. regard an increase in the rates of exchange at all unfavourably, and there is reason to believe that the Government will shortly initiate a move to bring about a measure of exchange inflation.

lit. 1-I.on. IMr Coates also declined to comment.

Mr Stewart declined to say anything for publication. Th.g Cabinet has be e n working at high pressure .since its meetings were resumed after the holiday,',, and it is understood that, within the past t.-m days, a majority of the Ministry have agreed, in broad outline, upon a policy for presentation to the House. It has been Mated freely, in political quarters, that the Ministers have not been ,seeing eye to eye on certain

EXCHANGE RATE QUESTION

THE EFFECT OF INFLATION

WELLINGTON, January 18

There are one or two membe rs of the Cabinet who have urged that the rates of Exchange should be . raised ever since the formation of the C°alitipn Government fifteen months ago. The Prime AT mister ha® said, all along,- that the matter should rest with thi? bank®.

questions. On the exchange rates, it is stated, Air Down : e Stewart has been at complete variance with other members of the Alinifstry.

However, when the Cabinet settled down to formulate a plan of action after Parliament adjourned, it is belived that strong pressure was brought to bear within its ranks to (secure the approval of a general plan whose keynote was the raising. of the exchange rate® to about 25 per cent. Added to this, it i® understood, the Oommitt.ee of three economists who have been .advising the Cabinet recently, have repeated their s®sertion s that the most effective T o1 ’ v ’ r for the .farming community could be secured through a higher exchange.

Mr Stewart has not attended the Cabinet meetings for some days, although he lie® had several conversetipns yvith other Ministers in his roohi ; and ha was not present to-day when Ministers met representatives .from the Farmers’ Union Conference, which waited on the Cabinet to place various (suggestions and opinions before' it.

A complete silence upon th* oue*tio,n of the Cabinet relations is being maintained by the Priam Minister and the other members of tho Ministry.

Jn view of th e attitude of the banks, it is stated that, if the Government brought about an increase it would have,.ho.Jake th a responsibility of redeeming the London funds which wjrrht accumulate.

In ispite of the fact that the statements were being froelv-made. that Mr, Townie SWart had tendered his resignation. both of the Leaders of the Government, Air Forbes and Mr C.oates, declined to be drawn when questioned.

Apart from this th e Secretary to the Treasury estimated, in hr® addendum to the (Economic Committee’s report. last February, that the raising of the exchange rate would hav e an adverse effect on the budget to the extent of about £3,590.000.

MR STEWART’S STATEMENT. When .asked if there were any truth ill the statements b e ing made, Mr Downie Stewart said that he would neither affirm nor deny the report that he had tendered his resignation. He ©aid that th e question wag one f° r the Prime Minister to discuss.

This responsibility, it is understood, Air Downie Stewart, as Minister of Finance, is not prepared to shoulder. The position at the moment is that j'-:3 b-'iS defined hi® attitude clearly to the Oabinet, with the statement that he cannot subscribe to the proposed policy. In view of the apparent determination of the Hovornment to go ahead with its proposed programme, M r Stewart is stated to have tendered his resignation.

Asked whether he would be prepared to contradict the statement that his resignation Yvas in t : le hands of the Prime Minister, Mr Downie Stewart ■said that he would not do ©o; nor would he make any comment on the situation gen e rally. Mr Forbes said that h e had n 0 intention of discussing th e position at all.

HIGH HATE CAUSES CONCERN,

As no official confirmation has been given of the fact that Mr Dow-tic ■Stewart has tendered hh resignation, ro information is available as to what aftitucb, the Government will adopt i.f Mr Downip Stewart maintains bis present attitude.

WELLINGTON, January 18

The .agitation by farming interests to raise the exchange rate, was considered at a largely-attended meeting of Wellington businessmen to.day. The following resolution was carried: “That th’s meeting views with grave concern the advocacy of the Farmers’ Union in favour of a 25 per cent, exchange .rate. Jt considers that the Farmers’ Conference is advocating—as some of the members present admitted—a high artificial rate, and that such rate, b e ng a false rate, can only be maintained by the Government guaranteeing the banks against the ■losses. Such an undertaking must involve the Government in a h e avy expenditure, the exact amount of which cannot be determined, and which must lead to higher taxation.”

However, it is understood that the Coalition leaders, in an endeavour to maintain an unbroken front, have bfte.n attempting to persuade 'Mr Downip Stewart to remain in the Cabnet. He has been approached by (several Ministers during th e past few days, but it i? understood that h ? has remained firm, and that he i.s not prepared to take back his resignation, .Although, when Parliament 'adjourned six weeks ago, the Prime Minister was insistent that the level of the exchange rates was a question entirely