DOLLAR CREDITS

Dominion, Volume 10, Issue 2932, 18 November 1916, Page 13

DOLLAR CREDITS

FACILITIES FOE, AMERICAN [ TRADE. Mr. Harold Beauchanip, who reachi cd Wellington on Thursday by tho i Auckland, express, aftor his' visit ■ to Canada and tho United' States, was ■ interviewed by a representative of The i- Dominion with respect to dollar credits. 1 Mr. .Beauchanip stated that when ■ in Vancouver ho gave an interview'to 1 a pressman, but the briof cable mes- ', sage sont to Now Zealand regarding • the details of that interview did not ' givo the exact facts. Mr. Beauchamp '< did not make arrangements for dollar ' credits with Montreal and Now York ; banks. Tho banks had already made ' such arrangements, and he merely stated that from his inquiries ho found 1 the system working satisfactorily. Asked, as to what was and would bo the effects of this now arrangement, Mr. Beauchanip pointed out that owing to tho difficulty of securing many lines of goods from Croat Britain tho importers'hero had to rely largely on the United States, and it was a dc- , cided convenience to have these dollar credits. Previously documents wero sent out via -London, and it often happened that, vessels using tho Panama Canal reached their destinations two' or threo weoks before the shipping documents arrived,, and delivery of cargo could bo obtained undor an indemnity. Now tho d'ocumonts arrived direct, and were hero practically as 'soon, if not soonor, than the cargo vessel. Mr. Beauchanip agreed that in viow of the restricted exports to tho United States, owing to tho embargo on tho various products, the balance of trade is wholly in favour of America, and no doubt the Americans are benefiting most by this new arrangement; but in view of tho peculiar conditions ruling it is a desirable innovation. London loses the exchange commission, but that, in the opinion of Mr. Beauchamp, may bo viewed as a temporary loss. New York is to-day the monetary contro of tho world, and there is no doubt tho Americans havo "money to burn." When Mr. Beauchanip was in the American city the rate for call money was 21 per cent., with' a slightly higher rate ruling for short loans. In London, Treasury bills at 6 and 1 12 months were yielding 5 and 51 por cont., and a high rate was being obtained in the open market for fine trado paper, and this disparity in rates between New York and London is causing gold to flow back to London. It is a fact that gold is being returned to England, and is fining invested in Treasury bills, which are regarded as a, very profitable short-dated security. ' American bankers and financiers do not .entertain any delusions_ about ' financial supremacy. They admit that while 'Now York is in the ascendant tb-day, London will soon recover the . position ouco the war is over. In- ' deed, many financiers would rather see . London 7 'dominant than Now York, because they prefer sterling exchange to dollar exchange. '