HIGH EXCHANGE

Wanganui Chronicle, Volume 77, Issue 133, 7 June 1934, Page 6

HIGH EXCHANGE

MR. WRIGHT’S INQUIRIES AUSTRALIA 1 ' HAPPY-GO-LUCKY ’ ’ WELLINGTON, June 6. Pertinent comment ou the high exchange position in Australia was made by Mr. R. A. Wright, M.P., on his return from JSydney by the Wauganclia to-day. “1 was told that >he Commonwealth dairy farmers particularly are Hi a pretty bad way notwithstanding the high exchange,” Mr. Wright said. “I interviewed the Deputy Governor ol the Commonwealth Bank on the exchange question, and he treated the matter very lightly indeed. He said it was quite correct that the ' Commonwealth Bank had assumed responsibility for the surplus exchange, and had At the present time about £IB,UOO,OOU in London. I asked him how far that was to be allowed to accumulate, and he said ho thought they could go up to about £50,000,000. “I asked him also whether there was any likelihood of the exchange rate being reduced, to which he replied that he really could not say; there were so many factors to be decided, including the political aspect with which he had nothing to do. i formed the opinion, perhaps with nothing direct from the Deputy Governor, that the rate was not going to be reduced. The usual arguments were advanced with which we are so familiar in New Zealand, including the need for assistance for primary producers. On my asking where the Commonwealth Bank got the money from with which to pay for the surplus exchange, he said it was credited to the trading banks and was a book entry, but 1 was unable to secure from him definitely how the trading banks were ultimately to be repaid for the money they had advanced. I also inquired from another balik manager and he candidly confessed he knew nothing about it, and said that all such matters were arranged by the head office in Melbourne. “Accordingly, I came away with the feeling that the Australian bankers did not seem to be troubled about the position, and that the Australians, whether bankers or anybody else, were happy-go-lucky people. With them it appears to be a case of ‘come day and go day, and let us get the best out of life.’ ” Mr. Wright added that he had also asked the Deputy Governor of the Commonwealth Bank whether he considered the lines upon which they were proceeding were sound, and had received an affirmative reply.