HIGHER EXCHANGE

Hokitika Guardian, 16 February 1933, Page 2

HIGHER EXCHANGE

AND IMPORTERS’ ASSOCIATION

MR DAVID JONES REPLIES

CHRISTCHURCH, February 15

“Replying to my challenge that the importers could not produce figurcr showing that their president j\tr Hamilton, could not substantiate his .statement ‘that the position was deplorable' in Australia, they now quote the in-cren-ed do ,t without one comparator' statement,” said Mr David Jones yesterday. The facts were all against them, said Mr Jones. Taking the yea' 1926 as a base and calling that 100, Australia '& price level last August was 77.2. and New Zealand’s 83.6. The fa]! in the price level had, therefore been greater in Australia. Australia was v-dueing her taxation, and last week the Commonwealth Bank informed the Federal Government that, ag the emergency had passed, they must now float •future loans in the open market. “The Importers’ Association make «e reference to my statement that the whole of Australia’s delegation to Ottawa supported a high exchange os beneficial to Australia,” Mr Jones continued.

“Importers refuse to face the facts proved by Government statistics, or answer how the farmer with h ; 6 export sales at 769 can pay the wholesaler 1200 and the retailer 1300. There is no use running away from the problem, and I again invite the importers to answer it or admit they cannot. It f s the heart of the problem. “Exchange is now 'being blamed for everything, but let me carry the importers back to a Financial .Statement laid on the table of the House by the late Minister of Finance, dated April 7 1932, showing a prospective deficit of £8,300,000. And in addition to sav> n f?r there was an increase in taxation of £2,200,000. It was afterwards dpc-id ed not to levy this new taxation, but to. obtain the amount by mortgaging t-h" Discharged Soldiers Settlement land tthe banks. The new taxation now to be levied is, therefore, mainly the taxation that was postponed from ■ lasi year. There will be increases in Government expenditure through exchange, but they will he far mor, e than compensated Jo.r by gains to Governmeni revenue.

“In the Black Budget” I maintain that debits are exaggerated and nr credits are given. As an illustration ; Customs revenue in 1930 was nearly £9.000.000. Tn 1932 it was £6.000.00r and falling further. The future fa'- ! i« debited to .exchange and materially swells the Budget deficit, although Australian' experience is that, with a high exchange, imports are expanding. Las* week’s cable news su'd. had a favourable trade Balance for six months ended December 31, of 065.090.000 in spit e of a great increase in imports.’ “It may interest your readers to Enow tliat an importer has .advised me that his fii’in has received advices that on five lines they import, the overseas .are carrying the additional exchange.

“My statement about Great Britain is not seriously challenged by the importers. Their remnrVs merely cloud the issue. Britain 'deliberately depreciated the currency and is holding it where she wants it by definite Government action and policy. It i«? mainly to h'eln her exporters, the manufacturers, and, through them, Britain -as a whole. Our exchange Is to help our exporters, the farmers, and through them, the whole Dominion, including the importers.”