WAR AND THE MONEY MARKET
MR HAROLD BEAUCHAMP'S VIEWS
THE FLOW OF GOLD ' By Telegraph—Press Association. Auckland, November 13. Mr. Harold Beauchamp, who was a passenger by the Niagara, says:— "With a view to keeping down the rato of exchange against London very largo quantities of gold were recently transferred from Canada to New York. Canada has been the channel through which has com© nearly half of the gold imports to the United States since the oloso of 1914. Since then the net imports of gold into the United States have amounted to over £103,000,000. Gold which has lately been coming to Canada is; it is understood, tho output of South African mines shipped to Canada, and thence sent to the United States. These mines are said to be £800,000 a week. They aro turning out enough, in other words, to provide a. reserve in the United States against credits at the rate of something over £200,000,000 a year. Owing to the way in which gold is accumulating in New York, bankers in that city have been unable to find' profitable employment for their funds in tho United States, and have recently been looking to London for temporary investments. No doubt the British Treasury Bills, yielding 5\ per cent, to 6 per cent, per annum, according to the term, would prove tempting when the rate for call money to-day in New York is round about 2} per cent, per annum, with small demand. Temporarily, at least, New York, as a money centre, has taken the place of London, but as the result of observations and conversations I had with leading bankers, I incline to the opinion that London will regain her financial supremacy within a measurable distance from the close of the war. Meanwhile, having regard to the wonderful expansion in exports from the United States to Great Britain and other countries, one does not wonder at the amazing growth in tho wealth of America, and of New York in particular."
. "Dollar Credits." In order to facilitate between New Zealand and the United States, the Bank of New Zealand some months ago arranged to issuo dollar credits instead of, or alternative to, sterling credits. An explanation of the system waß given by Mr. Beauchamp, who is chairman of directors of the Bank of New Zealand. The new method, he said, would obviate the necessity of financing on the Loudon, market as heretofore. In the past, for payment of goods imported to Now Zealand; it was customary to draw on customers in New Zealand tinder lotters. of credit established through London banks. Under the new dollar' credit system payment is made by representatives of branches of the Bank of New Zealand in various cities in. America; and remittances to provide for these are made from New Zealand to States'either by telegraphic, transf or or otherwise. "I do not take any credit for inaugurating this system, as provision was made for it prior to my departure from New Zealand,"' said Mr! Beauchamp. "I found, both in the United States and Canada, that the altered system was very greatly appreciated, and that it would tend to facilitate trade between both countries and New Zealand. In conversation with several New York bankers, I was led to understand that when conditions had again become normal, it would be more convenient to revert to tho old system of financing. This alteration in the manner of financing is duo to the fact that America for tho time being is a creditor' nation, with the result that owing to large accumulations of gold in New York, monoy in that city is to-day appreciably cheaper than what it is in London. When I left Vancouver on October 25 the rate for call money in New York was from 2 to 2$ per cent., as against 6 to 6 per cent, for money in London."
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Dominion, Volume 10, Issue 2928, 14 November 1916, Page 9
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645WAR AND THE MONEY MARKET Dominion, Volume 10, Issue 2928, 14 November 1916, Page 9
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