DOUBTFUL HELP

Rotorua Morning Post, Volume 2, Issue 257, 22 June 1932, Page 2

DOUBTFUL HELP

SUBSIDY FROM THE BANKS NOT CONSIDERED LIKELY. The Financial Times, of London commenting on the New Zealand exchange rates controversy, states, inter alia : — It is admitted that primary producers need assistance, but banks prefer to give direct rather than by ex- . change manipulations, and it is understood that the banks are prepared to give a subsidy bonus if the case for an increased exehange rate falls fco the ground. Full confirmation of this statement is not available in New Zealand, but a pressman who interviewed a prominent Wellington hanlcer, was informed that it is most unlikely that the report in the Financial Times is intended to convey that the banks would contemplate providing a subsidy by way of gift. An effective subsidy would involve a very large sum, and for any institution or group of institutions in New Zealand to make a straightout gift to such an extent would not be practicable. That the banks or some of them had completed any arrangements to finance a subsidy by co-operation with the Government or otherwise was not confirmed to our representative, though it was not denied that assistance by this means would be both sound and practicable. On being asked whether any proposals for a subsidy were under consideration or were likely bo be, the banker replied that he did not fcel himself at liberty to make any statement at present. Asked whether he considered a. subsidy preferable to artifieial exehange manipulation, he replied that he considered a subsidy conducted on sound lines much preferable as a general principle in a period of real hardship. Such a subsidy could he properly regulated and controlled and need not be considered as a permanent measure; whereas artifieial exehange inflation, besides having many harmful effects, was liable, once initiated, to become quite uncontrollable.