OCR Text |
Show REASON FO H LOW EXCHMGE TOLD Yellow Metal Sells at Price Far Above Normal Value in London Circles. Sales of new gold in London at 111 shillings o poiiuo an ounce, against a normal value of 81 shillings 11.4 pence repsents a disoount of .64 per cent Iivin guld arity, according to tlic Boston News Bureau. .Sterling exchange in New York on the same day sold from $3.65 V to $3.69 Vi. Commenting on this, a banker who has been dealing in l'oruigti exchange for 1'orty years, says: "There is a much deeper seated reason rea-son lor the decline in British exchange in New York than the recent heavy oi-fcrings oi-fcrings of merchandise bills. This decline, de-cline, by checking exports from America and encouraging imports, will rapidly correct the enormous trade balance against England. Exchange at $3 .70 amounts to a tariff on American shipments ship-ments to England of 23 per cent, and an export bounty of per cent on shipments ship-ments from England here. "If the readjustment of tho merchandise merchan-dise movement were already completed, sterling exchange would still rule at a heavy discount. "England is not on a gold basis. New-gold New-gold as it arrives from the mines is dealt in freely in London at a large premium pre-mium and can be shipped abroad, but the export of gold coin is prohibited. "England is so deeply in debt as to create an apprehonsion, unnecessary, I believe, but widely prevalent, as to her ultimate ability to fully discharge all her obligations in gold, and this apprehension apprehen-sion is increased by the continued extravagance ex-travagance of the present British government. gov-ernment. Current estimates are that excess of running expenses from revenue reve-nue for the fiscal year 1919-1920 will add a further 475,000,000 to the British debt and the end is not yet in sight. "The British government will have to live within its income before there can be any permanent, substantial improvement improve-ment in exchange from its present level." |