VALUE OF THE POUND STERLING

Dominion, Volume 12, Issue 199, 17 May 1919, Page 6

VALUE OF THE POUND STERLING

A STEP THAT ENCOURAGES ' EXPORTS. Messrs. Morgan and Co. recently received instruutions-to cease the purchaso of sterling undertaken during the lvar to', stabilise the exchange market. They explain that this step is designed to permit business to resume .its normal course.

• The step (litis announced is exceedingly courageous, although it has been advocated for some timti in business circle?. During the war it was necessary to support the value of the British pound sterling as compared with the American dollar, and by this support the pound was maintained at a value of about 1.761 dollars. Had it not'been so maintained tho pound would havo .been worth much less because of the huge number of dollar* ho had to buy 'with pounds sterling to pay for our heavy imports from the United States. T?bw the exchange has to look after itself, and a forecast of the disturbance which will be caused in London financial circles was forthcoming, when a belief that Government control had; been removed brought vht value of tho pound down to the low figure of *1.66 dol-j lars. An advantage of this low valutf of the sovereign to in is that it discourages importslrom the United States and encourages exports from this country to the United States.