OTTAWA AND PEGGED EXCHANGE

Wanganui Chronicle, Volume 83, Issue 49, 28 February 1939, Page 6

OTTAWA AND PEGGED EXCHANGE

Sir, —The writer is one that does no agree with your frequent attacks 01 the Ottawa agreement, and artifleia exchange rate, and takes these attack: as representing your paper’s policy. A farmers, we notice that whenever it i a matter of city interests versus farm ing interests, the "Chronicle" alwav: champions the former. As a. matter of fact the Ottawi agreements meant the saving of tin New Zealand sheep farmer from rum but only in that indirect way did thej benefit big business interests, hence your disapproval of them. The principal of restriction was not born at Ottawa, it was the child o! necessity, the fruit of over supply tc Britain by the whole world. Th( Ottawa agreement, was one amonf friends, to restrict Britain's meat trade to mainly her friends within ihe Em. pire. What was wrong with that' At the time of the agreement, anc since, the position was that New Zealand had reached a stage of meat production very much nearer our limits

than our market competitors. Australia, South America, and Africa, etc, Take Australia’s case alone. Shortly before the meat glut of 1931 Australia, with 110,000,000 sheep, exported onefourth as much only as New Zealand, with 28,000,000 sheep. Australia was awaking to the position and the drop in wool values was forcing her into meat export and her potential capacity in that was tremendous and could cripple New Zealand's trade in the same articles when fully developed. The same position obtained in several other countries and the Ottawa quotas meant the protection of New Zealand's premier position in the mutton and lamb export business. It is not the Ottawa agreements but the situation that called for the agreement that gives rise to our troubles. I heard Mr. Ormond Wilson. Mr. Coates’ political opponent at election time, admit that Mr. Coates’ work at Ottawa was undoubtedly good for New Zealand. As for exchange control, would you give the writer fair answers to these questions:—Would you advise New Zealand producers to compete with and sell their goods against Australia and South American countries who were using an exchange of 25 to 30 per cent, advantage over us, respectively, without us pegging our exchange likewise? Could New Zealand continue indefinitely selling all her e:Zorts to a market in which her competitors had 20 to 30 per cent, advantage?—l am, etc., F.J.S. The implication of our correspondent s question on exchange devaluation is that the country which devaluates her currency most is the best off. History, having disproved that contention, it doesn’t merit argument. The Ottawa agreement made the breach in New Zealand's free market in the United Kingdom; subsequent limitations follow as a matter of course.—Editor.