HIGH EXCHANGE

Hokitika Guardian, 25 March 1933, Page 2

HIGH EXCHANGE

ASTONISHMENT OVERSEAS

BRITAIN’S POSITION IN WORLD

AUCKLAND, March 22

“Wherever I went I heard a great deal of astonishment expressed regarding the increase in the Now idealanci rate of exchange,” said Sir Mark Sheldon, who arrived at Auckland by th© Aorangi last evening on his return ’to Sydney .after visiting Britain, the United States and Canada. “People can’not understand it,’ 1 he said, "in the face of New Zealand’s larg© balance 0 f exports over imports. fl lt was taken for granted that there must have been a strong political move to bring it about, A matter of great interest wasj who is going to pay for it in the end? The Government has an arrangement with th© banks. The opinion was that ther e is going to be a serious loss falling on someone.” ~Referring to the financial crisis in the United States, Sir Mark said it was evident that the banking system i'll that country would have to be changed. The currency of the United Stat© s wag sound. It was only that the banking machinery was very weak. Americans had not been trained in banking. (Each small town had its own bank. When the hard times came the farmers wanted their money, but the banks could not call up thei r overdrafts. These small American banks indulged in speculation with their client's’ money, which was contrary to the practice in New Zealand and Australia.

Speaking of Britain’s economic and financial position, Sir Mark said that, Just a e old ideas as to gold prices had received a severe jolt, by reason of the stability of sterling and the f act that , the World generally was satisfied that sterling; was a fair standard, go another thing had happened. Traditionally a free trade country, Britain had becom©. a protectionist coun. try and to-day held the whip hand. By reason o,f th© fact that she had been forced off the gold standard and now had a protective tariff, she was no longer currying favours. Others were knocking at 'her door and asking for concessions.

While in England he had heard a good deal of talk on the butter question, If, under present' conditions, quotas were not introduced, h© thought there would be no bottom to the level which prices might reach.