DOLLAR VERSUS POUND.

Taranaki Daily News, 30 August 1919, Page 6

DOLLAR VERSUS POUND.

THE INCREASING MARGIN.

The significant and serious position that confronts New Zealand in respect to the dollar exchange Was vividly demonstrated to the Auckland Star by Mr. John Hooton, general manager of the Farmers' Co-operative Federation of New' Zealand.

Mr. Hooton adduced some startling figures- He pointed out that on May 8, the exchange rate in New York for sight drafts on London was 4.605 dollars for the pound. To-day the late was 4.125 dollars to the pound, showing that the Americans gained by a margin of ,5245 dollars on the exchange with British countries. The effect of the steady tide against Britain which had recently set in was exceedingly serious from New Zealand's point of view. It was pointed out by Mr. Hooton that, inasmuch that on May 9th of this year £lO7 2s 6d sterling would have bought 500 dollars worth of goods in America, the same goods to-day, after a lapse of three and a half months, would cost no less than £l2l 4s 3d. ' In pther words, goods being purchased by New Zealand from America cost 1,31 per cent, more than they did on May 9. As to preventive economic measures to counteract the operations of the American exchange ' against .New Zealand buyers, Mr. Hooton was not prepared to suggest any definite steps, but he pointed out that the steady increase in the value of the pound was due to the fact that, although the war was ovei, America still increased her output to Britain and maintained the balance of trade against her. So long as our trade went through London New Zealand would also hayc to bear the depreciation of the pound in the American markets. Another factor was that imports and exports as between New Zealand and America had not nearly the disproportion of the British American trade. One suggestion was direct exchange of goods, and another the installation of a New Zealand banking establishment in New York.