EXCHANGE & TRADE

Wairarapa Times-Age, 1 February 1939, Page 6

EXCHANGE & TRADE

CONFERENCE COMMITTEE STATEMENT REPLY TO THE MINISTER OF FINANCE. CALLS ON STERLING FUNDS. (By Telegraph—Press Association.) WELLINGTON, This Day. Observations on the three main factors cited to the importers’ conference last week by the Hon W. Nash (Minister of Finance) as responsible for the decision to impose exchange control, are made in a statement issued today by the Conference Committee. The statement, says the Minister, did not explain that the removal of funds from New Zealand because of exchange rata considerations was due to the Government failing to keep its pre-elec-tion promise to scale down the rate. If the Government’s action in deferring indefinitely the scaling down of the rate was an endeavour to keep those funds in the country, it had had ample time to see how its efforts had failed, and to shape a course accordingly. No evidence had been found of the concerted efforts contended by the Minister to send money out of the country for better interest rates. It was quite correct that over a period of years money left New Zealand for that purpose, but the Minister did not mention the very considerable amount of capital that had taken flight through fear and discouragement resulting from restricted interest rates and crushing taxation on the earnings of capital.

Regarding Mr Nash’s contention of over-importation, the statement points out that the Minister was altogether silent concerning the extent to which gross over-spending by the Government and huge importations for public works and other purposes had eaten into the Dominion’s sterling funds for a long period.