DOLLAR EXCHANGE.

Hokitika Guardian, 8 October 1925, Page 4

DOLLAR EXCHANGE.

XIIK FA 1.1. IN THE STKKEIXt

At the beginning ol the week sterling dropped to •1.-d IT-10 dollars, tv lui it eoninare with f.Sof dollais mi .May i. about three weeks alter the restoration of the gold standard, and .1,7 S■- dollars on April 14, or a fortnight he to re the gold standard was restored. Since the- end ol July the rate has tended downward-., hut it t- -nil :r of . the gold point. In any event, should

touch the gold point, it does tail billow that gold will 1)0 sent across the Atlantic ..remarks the " Dominion "). It was explained by .Alt' Churchill ill ills budget antiouiiein:.; the restoration ol the gold standard that the Hank of England had arranged for a loan of L’00,000,004' dollars from the Eederat .Deserve Hank should such he needed, and the British Government arranged with J. P. Morgan an Co. lor a further lUUjOJO.OOO dollars in ease ol need. AA hen reituested by the Bank oi England, the Federal Deserve Hank will buv sterling bill- in the open market, which would immediately restore tut hank rate. That the exchange rate would iluetuate was anticipated, lor it was classified as one oJ the disawv.ullages of the reversion to the gold s;a;tdar. which involved a temporary overvaluation of the exchange. Jt is jus', possible that the bank discount rap may he advanced to -V per cent, but no doubt the batik authorities will avoid, if possible, placing this burden on trade. AVhat is certain is that a strict supervision will he exercised

over overseas loans, and there is now very little hope of any overseas dominions being able to borrow in i,melon tor

GB&iiSGjasnasi.