The Guardian AND EVENING STAR, With which is incorporated “The West Coast Times.” WEDNESDAY, MARCH 30th, 1921.

Hokitika Guardian, 30 March 1921, Page 2

The Guardian AND EVENING STAR, With which is incorporated “The West Coast Times.” WEDNESDAY, MARCH 30th, 1921.

THE FINANCIAL SITUATION. N kith hr New Zealand, nor the Empiie at' large, have a monopoly of financial difficulties at the moment. These, troubles are world-wide and even th 0 United States with all its advantage in currency, has its difficulties no less acute and pressing than other parts of the world. In South America, likewise. there in a serious financial stringency. In fact in .January hist, Brazil was facing a financial crisis. It is interesting in'the circumstances to note what other countries are doing to grapple with the position in order to minimise the effects of the monetary stringency and present failures of large Ims.iiiess enterprises becoming general - and m turn bringing (loan lesser enterprises and so paralysing trade and producing acute unemployment. A Reuter message from Rio de Jnnieri says that the Journal do Cominereio publishes an interesting interview with the hunker and manufacturer Count Alexandre Siciliano, President of the Mechanical and Importing Company ol San Paulo. Count Siciliano contends that the pivotal point of the present crisis, so lar as Brazil is concerned, is the fall is the exchange, which has had the effect of raising the price of enormous quantities of goods imported, particularly from North America, during the last few months, while at the same time the slump in coffee, Brazil’s principal product, lias lowered considerably the value of the exports. This disturbance of the balance of foreign trade is, he says, becoming dangerously accentuated and is threatening a crash, owing to the execs'sive rise in the dollar. To secure the ro-estahlishinont of equilibrium, Count Siciliano advocates a foreign loan of fifty of sixty million dollars, and recommends that: alter a deduction of that portion of the loan required for the interest on Brazil’s foreign debt, the gold surplus should he sold in th,. financial markets to traders requiring drafts to send abroad. With the proceeds of this sale in Brazilian paper money, the Government could then, as it had done before, effect an increase in'coffee values by buying up and storing Considerable stocks of coffee, so as to bring conditions back to normal so far as the coffee market is concerned. Later on, by selling this coffee abroad, the Government could recover the gold parted with increased by the profits derived from coffee operations, and would consequently enjoy more fafourable conditions for the redemption of the loan. 'Hie Count then went on quoting numerous statistics, to draw a eomjxirison between the present situation and that prevailing at the time when the first'operation to support the coffee market took place, and expressed the market far from being dangerous, would he very beneficial. On being asked a question as to the difficulties that would probably he encountered in securing a hie loan abroad, Count Sieiliano said lie did not believe they would be met with, especially if the Government applied to the American financial market. “To lend us fifty or sixty million dollars,’’ lie said, “while being a safe operation, would be the best wav for the North Americans their traders, their manufacturers and their financial groups—to collect what we owe them on oil imports. Without melt a loan a disastrous liquidation is threatened.’’ The interview has made a deep

impression in official and business circles is an instance of the general ne-

cessity there is to deal with the whole position in a comprehensive manner.