The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, JANUARY 26, 1933. THE EXCHANGE ISSUE.

Hokitika Guardian, 26 January 1933, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times THURSDAY, JANUARY 26, 1933. THE EXCHANGE ISSUE.

Tun Government has encountered genuyJ c.'ppoyhio'ii from the' mcnopol-ta.i press and manufiaeturing and banning intercuts in regard to the exchange issue. Within the Coalition party, ai.so, there is the project of material opposition, which joined with Labour and Independent members, may produce' uoiiifcthing of a political ensis. The chief complaint against Cabinet that itr Iras gone' back oiv its former attitude, when u was disposed to leave the 'adjustment of the exchange race to the banking jnstjtutio'iis, The banks with one exception, were pier pared to leave the issue' to the supply and cemand of money, ill other wo.a allow trading to the matter. Now that the Government policy lias been reversed /the banks through the Chairman of the Association, strongly criticise tine action. The banking opinion must be of considerable value, and in the debates to ensue in the Hom e a.t the session opening fo-clay, will bo the strongest argument against Government action. However, the Cabinet views have not been fully disclosed yet, and we take it it will now be quite necessary if the Government is going to stem the tide of 'political and financial opposition, to place all the cards on the table and explain exactly why the step wa.s taken. No doubt the action was caused by the plight of the producer who is the mainstay of the national wealth, but just how far the producer was in difficulties ha-s not yet been disclo-ed. It its conceivable the case of the producer is a bad one. The low level of prices; the doubt all-out an early rise, combined with the increasing volume of production, suggests the producer is in for a bad tiniie. How far the country als a whole can endure that /state of affairs is the crux of the position. The Government decided it could not last much longer, and probably that view is correct. The meat trade suggests that the assets of the grazier so great a factor in the poet, are disappearing. Bo with the dairyman, his returns are down mors than fifty per cent., and may go lower yet in view of the increasing world production of dairy pro, ducts. That appears to be the main issue confronting Cabinet. It is true it is a farmers Cabinet—more representative of the country than the town, and therefore more disposed to understand the producers’ plight. But the town interests would be considered also, and the Government had an example in rising the exchange rate from ten to twenty-five per cent. The latter rate has ruled for a long time in Australia, and there have been efforts to raise it even higher there. But Australia lias got along under the twenty-five per cent, impost, and we are led to believe the Commonwealth i'g improving financially. Probably Mr F'orbes and his colleagues bad all this in mind, and as something had to be done, what was done was patterned on the financial policy of a neighbouring country which had not been ruined by the action. Australia als the big brother of New - Zealand, has larger and greater obligations in every way, and is emerging from the ordeal with promise. The members of our Cabinet have had to face a situation doubtless somewhat desperate so far 'ah the national weal is concerned, and it is now for the Ministry to justify its action before Parliament and the country.