THE FALLING RATE OF EXCHANGE

Dominion, Volume 12, Issue 284, 27 August 1919, Page 7

THE FALLING RATE OF EXCHANGE

SERIOUS SITUATION EVOKES COMMENT sir auckland geddes's views .:;: By Telegraph—Press Association—Copyright (Bee. August 20, 10.15 p.m.) ; '?■''■''"' London, August 26.'■ The newspapers continue to draw at-' tention to the adverse rate of exchange between London and New York. Although the-market has recovered slightly i.from the violent shock following on--3lr. Lloyd George's speech, further fine--, tuations'are anticipated. It is,,gejierally agreed that the break will have served a useful purpose if it, draws the attention • of the public to our enormous indebtedness to the United States and opens people's eyes to the evils of extravagance anil convirced them that the importation of unnecessary articles and the absence of expansion at the ports will further depress the exchange, automatically increasing our indebtedness. It is nowted out that the fall in the exchange will react unfavourably on Americans ; export trade, and has already resulted m the cancellation of a considerable volume of orders. American exporters .are also incurring losses owing to taking pay-' ment in depreciated European currency. Sir Auckland Geddes dealt with tie situation in his speech at Basiugstoke. He said that the. two great problems before the country were to get production and find markets. The Government was organising a system of export credito for facilitalinp the resumption of export trade to disorganised parts of Eastern Europe, and was also remodelling and strengthening the consular, commercial, ' and diplomatic services, and making an effort to'foster trade within '.lie Empire. ' .Regurding production, our greatest dan- ' cer was the decline in the output of ■ coal without which the recovery of Europe was impossible. ■ There was no danaer of America, flooding us with! ; goods. She was not only a great exporter of manufactured goods, but the greatest exporter of raw materials. Sho wanted little from abroad, "and consequently the money exchange moved in her favour. Every siich movement interfered with her power of export. Sir Auckland Geddes added that if America continued to sell great quantities of-food to Europe, and the latter paid for them in, money tne exchange would move more' and more in her favour, until food and i manufactured goods from America would I lie almost unbuyable. Therefore,, Europe i must work but its own Balvatlpn, iriicli could only be done through hard work i and increased production in Iho mines, l fields, and factories.—Aus.-N.Z. Cable , Assn. . . ;