QUACK REMEDIES

Rotorua Morning Post, Volume 2, Issue 264, 1 July 1932, Page 4

QUACK REMEDIES

The eonsensus of bank-ing opinion is that a high rate of exchange artificially induced would penalise the majority to benefit the minority. v It is also admitted that no reason for a high exchange rate exists to-day. However, it must have been evident that the Bank of New South Wales would take measures to have the rate increased if this could possibly be done, and apparently its opportunity has come. It is useless for anyouel to protest against what is so patently an imposition, for we are living in a world that subscribes to the Napoleonic principle of "Sauve qui peut." The Bank of New South Wales no doubt has reasons which are sufficient to itself and is playing the game nnder a set of rules that regards finaneial insurgency as legitimate. The arguments of the organisations representing the primary producers, and of those who are vitally interested in a business way with the success of the primary producers, are arrayed against the considered opinion of men to whom the matter of exchange is as an open Tbobk. In this connection the opinion of Mr. E. C. Riddle, Governor,' of the Commonwealth Bank, is pertinent. He said his bank took the view that in fixing exchange it should be guided entirely by the economic and finaneial rate position at the time. With a big trading balance in our favour, and a good record in this respect over the past ten years, there is no reason why our credit should he prejudiced in any way. That also is the impression of leading bankers, and of business men of standing who can give-the position a dispassionate survey. Mr. Riddle deI clares that "if a high rate is deJ sired in order to assist any particular section of the community we take the view that this is a uolitical matter and one entirely

for Government action and responsibility." The Coalition is evidently not disposed to accept this dictum, and under pressure has left exchange to the tender mercies of those who have endeavoured for months past to create an atmosphere in favour of a high rate as the salvation of the country. While half-a-dozen representatives of exporters are hprrying to Ottawa to advocate some measure of raising the price of their particular produce above the economic level, Mr. Stanley Baldwin is deploring the world-wide restrictions on trade, declaring that no fewer than thirty foreign countries have some kind of exchange restric-

tion, and that "their restriqtions are telling probably more against the recovery of trade even than tariffs, which throughout the world have been increased." It does not matter that Mr. Baldwin's party captured the imagination of the British people with a policy of protective tariffs a few months ago ; he is telling the truth now, and probably realises that, whatever he may have thought at the time, discrimination against those countries which purchase British manufactures would be fatal. The fact of the matter is that New Zealand butter and cheese are worth only what they will bring in the open market, not that amount plus 20 or 30 per cent. collected from all who are compelled to import articles from Great Britain. New Zealand is not gaining, but one-third of the population is profiting at the expense of the other two-thirds. As not one penny more comes into the country as a result of this extraordinary finesse, in what way can salvation be effected? Those who advocate such illusory measures are not concerned with the national interests, but only with their own personal problems. The fear is expressed by British manufacturers that if the Bank of New South Wales raises exchange, and in this manner depreciates the New Zealand pound the volume of imports, already reduced considerably, will- de-

minish to an even greater extent. It is certain to happen in cases where importation is not es'sential to business that orders will not be placed with Home firms, and this means that the trade relationship so essential to mutual recovery will be restricted. Our future welfare does not depend on prices improved by robbing Peter to pay Paul in our own country but on an increased price due to the better purchasing power of the British consumer, which follows logically on steady national convalescence. We cannot place any hopes in the results of meretricious aids

to business, our only real assistance can come from the consumers of our produce paying higher prices or beifig multiplied by the exploitation of unexplored fields. That is why we believe that half a score of countries, obviously concerned with their own individual affairs, can accomplish very little at Ottawa, especially as complications will be raised by the delegations representing particular industries. It might be pointed out to these people that recovery will come through the spirit of eoncession, not as a result of any appeal for personal assistance. If we cannot promote recovery by natural means there can be no real benefit at all, for fortune does not come merely from taking money out | of one pocket and putting it in another.