LABOUR & EXCHANGE

Hokitika Guardian, 30 August 1933, Page 7

LABOUR & EXCHANGE

(Christchurch Press.) In a speech at Sumner reported in “The Press”, Mr H. E. Holland saic: some fantastic and misleading things about the Government's exchange policy. There is no need to deal with hi s charge that the exchange wa s “pegged up at the dictation of the large landowners in the Cabinet,” tor he himself contradicts it elsewhere in liis speech by asserting that a. group within the Reform party threatened to turn the Cabinet out unless it raised the exchange. Not for the first time Mr Holland’s inveterate maliciousness has overreached itself. It is not necessary, either, to answer his tirade against the high exchange. It is sufficient to poinfc out that, when the exchange issue was being hotly debated throughout the couutry and the Lobaur party had an opportunity to influence public opinion l>y n plain statement of it s attitude, Mr Holland and his friends preferred to maintain a discreet silence. As the internal effects of the high exchange ivere not difficult to foresee, it must be suspected that Labour now opposes the high exchange merely because the Government has taken the responsibility for it. But the passage in Mr Holland’s speech which cannot be taken lightly is that in which lie says: “At the end of the year we will -be £8,000,000 behind on the cost of exchange alone. . . . .” There can be only two

explanations for such a statement: either Mr Holland has not taken the trouble - to familiarise himself with the exchange' situation or lie is trying to take advantage of the difficulty which most people experience in understanding the Government's transactions under the Banks Indemnity Act. The figure of £8,000,000 lie mentions is a rough estimate of the total amount of exchange the Government will take over from the hanks in the present financial year. Against this, however, must be set the amount needed to meet ordinary Governmeni! exchange requirements in London. The official estimate is that in 1933-34 the total net cost of the higher exchange to the Government will be £1,400,000; and though interim returns suggest, that the actual figure may he higher, it will be very surprising if it exceeds £2,000,000. Moreover, as Mr Coates points out, some accumulation of funds in London i s to be desired, since it will .facilitate the establishment in New Zealand of a central reserve bank.