HIGH EXCHANGE

Rotorua Morning Post, Volume 3, Issue 644, 23 September 1933, Page 5

HIGH EXCHANGE

(Press Assn.-

STRONG ATTACK ex-minister) moves bill to Repeal indemnity act MEAS.URE CONDEMNED

— By Telegraph— Cnpyright).

Wellington, Friday. The session's debate opened this afternoon with a very strong attack upon the Government's high exchange policy initiated when an ex-United Minister, Mr. W. A. Veitch (Wanganui) moved the first reading of his "Banks Indemnity (Exchange) Repeal Bill. Labour and Indepeiident .members combined in condem'ning the high exchange policy and were joined hythe Government member for Mataura, Mtr. D. McDougall, who represents a rural constuency. In introducing his bill, Mr. Veitch said that it simply proposed to re- | peal last session's legislation. which empowered the Go-

vernment to . conipensate ■ the banks for any losses fhey might suffer through the compulsory raising of the exchange rate. He had voted against' the originlegislation and to-day he was convinced that as a result of raislng the exchange, conditions

had developed which had proved more harmful than_anyone had. predicted. The effect of th>3 Government's class conscious attitude had been devastating to industrial commercial land wage and salary elements and the bfnefits which iti had been alleged would accrue to the farming comntunity had been largely imaginary. The high exchange had benefitted .only that section which was- hetter described as the -la,rge landowner; there were hundreds of people being driven from their homes hy economic conditions whactiC were largfely due to thqf high rate of exchange. Mr. F. Langstone (Lab. Waimarino) said that Parliament had had no say in fixing the exchange rate and the alleged action of the Government had allowed unlimited speculation by "those in the know." Farmers had now freely admitted that the alteration had not benefitted them. Mr. W. J. Polson (Ind., Stratford) : "Nonsense." Mr. A. Harris (Lah. Waitemata) invited the Government to sponsor th'e bill and repair the wroiig it haci done earlier in the year. History had proved every word of denunciation which had heen delivered against the , Government's policy. The adminisj tration would lose nothing in presI tige if it admitted its mistake. and i took action to remedy it. Incalculable j harm had heen done to city - dwellers 1 and the henefits claimed for the rural section had not ibeen realised. Com- : mercial development had heen paralysed to a large extent and a harsh : brake had heen applied to importai tions with consequent loss to the cus- ■ toms revenue.

Count the Cost Mr. R. A. Wright (Govt. Weliington Suburbs) commented on the silence of the supporters of the high exchange policy and asked the Minister of Finance to tell the House what would be the cost of the indemnity to the country. Mr. D. G. Sullivan (Lah., Avon) i said what had happened in the case ! of the Southland Power Board was an I indication of the grave difficulties j that had been created for local bodj ies through the depreciation of the J currency in the interests; of a partiI cular section of the community. J The Government had intimated that I it would introduce legisiation coip- | pelling -the Southlaud Power Board. to | pay. It would he interesting to see ' how it would do it.

While the Christchurch City Council had met its obligations in sterling because it desired to play the game with the people from whom it had borrowed money, members at the same time resented the additional dejbt service cost they had to nleet thriough the Government s high exchange policy. Mr. Sullivan said that if a referendum were taken 90 per cent. of the votes would be ag'ainst tbe Government's attitude. Mr. P. Fraser (Lab., Wellington Central), said that if the Government | members who were supporting. the j measure were sincere they should vote | the Government out at the first opj portunityi ! Mr. A. J. Stallworthy (Ind., Eden) said that the raising of the exchange rate had cost the Auckland metropolitan local bodies in one year in interest and capital charges a sum of : £200,000.

Mr. D. McDougall (Govt.„ Mataura) said the Southland Power Board was prepared to honour its pledges. Every dehenture it had issued stated that interest would be paid in N.ew. Zealand pounds and the hoard would pay as it had promised. The Government had deflated the currency hut that was not the board's fault. He hoped that the Minister of Finance did not t.hirilr his telegram had frightened the people of Southland. .. . "They are hard to frighten down there," he added. Mr. R. Semple (Lab., Wellington East) said; he had not met one farmer who claimed any benefit from the high exchange rate. The bill was read a first time on the voices the House rose at 5-.25 p.m. till 2.30 p.m. on Tuesday. Th'e Prime Minister . said that tributes to deceased legislators would then he paid and the Address-in-Reply debate he initiated in the evening.