Sterling Shaky

Copra Growers Fear Another Blitz

Letter to the Editor

Sydney Morning Herald Of

October 18, said: “Increasing weakness of Sterling has raised the possibility of further devalua tion”; and a special article in “The Australian Financial Review,” dis cusses the course that Australia should follow if Sterling should be further devalued against the dollar.

This is ominous reading for the copra producers, who are bound to Sterling under British Ministry of Food contracts, whether accepted by them voluntarily, or forced upon them by British Colonial Office wallahs.

The big swindle of 1949 is still fresh in the minds of the planters.

Sterling was devalued approximately 30 per cent, then without any re vision of the nine-years contracts.

The action of the Australian Government in following suit by devaluing the Australian pound, in line with Sterling, softened the blow to some extent; but it did nothing to guard the planters against the rising costs, consequent on the re valuation of both currencies.

We all know the extent to which rice, tinned meats, copra bags, trade goods, fuel, etc., have increased in cost since devaluation.

NOW, it looks as if it will be on again. The Belgian Premier, a few days ago, stated that European currencies (with a few exceptions) were very weak in relation to the Dollar, and that the pressure for devaluation was so great that it was feared that Sterling would be unable to with stand it.

As we all know, had it not been for the strenuous efforts of Sir Arthur Fadden to avoid loss of the exchange premium on primary products exported overseas, the Australian currency would have been revalued to parity with Sterling long ere this, with a loss of 25 per cent, to producers of primary products, including copra. If Sterling is again devalued, it is doubtful whether the Australian Country supporters would have sufficient strength within the Government to withstand the forces who desire to see a reversion of the Australian pound to parity with Sterling.

In addition to the immediate loss of 25 per cent, to copra producers, we should face a further period of rising prices, similar to what has occurred in the last few years in the various items making up the cost of production.

Nor can it be expected that the British MOP would do the decent thing and revise the copra purchase contracts to bring them into line with world prices. Unfortunately,

the British MOF has shown in no uncertain manner that it is more concerned with obtaining copra at the lowest possible price than with the ethics of the matter.

The victims of the nine-years MOF contracts should declare themselves without loss of time. The spirit of the nine-years contract was broken in a callous, and cold blooded manner by the refusal of the MOP to acknowledge any need for revision at the time of the 1949 devaluation of Sterling. Any further attempt to work the same swindle should be met by immediate action ion the part of the planters.

It would be better still to take time by the forelock and state plainly and unequivocally that, in the event of devaluation of either sterling or the Australian pound, they will regard any failure to in crease the contract price as being equivalent to a repudiation of the contract by the MOF; and that, in such event, they will insist on selling their copra on the open market.

I am, etc.,

Ex-Solomons.