RATE OF EXCHANGE

Evening Post, Volume XCVIII, Issue 114, 11 November 1919, Page 7

RATE OF EXCHANGE

EXPERIENCE IN AMERICA

HINTS TO TRAVELLERS.

(JROII OUR OWN CORRESPONDENT.)

SAN FRANCISCO, Ist October.

The principal difficulty fe be encountered by travellers to this continent at the present time is in connection with the rate of exchange. In order to escape its heavy toll, hundreds of people from Australia and New Zealand carry gold with them. In such a matter, it. is naturally impossible to give ngures, but it is estimated that passengers by 8 . recent steamer carried at least £2000 in gold from the Commonwealth and the Dominion. English cold fetches at least 4.85, sometimes 4.90 in Canada and the United States, but a 'percentage of the gold surreptitiously brought away never enters a bank, as it is whispered that certain firms offer more than its value and sell to Indians at a greatly enhanced rate. Tho Chinese give very high prices for American gold, i but^ will not look at English gold, which ts taVoured by the Indians. On account of the inflation of the currency, the Government may, perhaps, take notice of this gold leakage... Intending travellers will do well to make careful inquiries in regard to the transmission of money Bank drafts, letters'of credit, circular notes, money orders,- etc., a,To, subject to heavy deductions owing to the low rate of exchange which, to-day, stands at 4.19 in the United States and about 4.35 in Canada (Canadian money suffers by 3$ to 4 per cent, in conversion to United States currency). The pursers on the Canadian-Aus-tralasian liners change Commonwealth and Dominion.notes at 4.75 Canadian or, if they have it, will part with American greenbacks at the same rate. A curious thing is that Australian notes are worth 4.75 in Honolulu and American and Canadian points, yet New Zealand notes are only worth 4.19, or whatever the rato happens to be. This is due to tho fact that the Australian Government has made a special arrangement by which the United States and Canadian banks honour its notes at the higher figure and the former Government pays the difference. Holders of New Zealand drafts do not know whether to cash them or to wait in the hope of better things. Questioned on this point yesterday a banker;said: "I quite agree that tho position is bad, but I do not think that any material improvement is at all likely. In fact, I expect a further fall: J.he rate varies from day to day but November sales are at a lower rate. It is not merely a question of wJien Ureat Britain will resume trading, but you must see that your currency is very much inflated by your heavy note issues. Our currency is slightly inflated, too, but we do not anticipate any difficulty in that connnection.

." During the war, when Great Britain was in need of our goods, she made special arrangements to keep tho rate of_ exchange at a fixed point—4v76, I think—but she is doing'nothing now, as it is not to her advantage to move. Britain does not really want to trade with us, as she wishes to foster Empire tnade, and the existing rate of exchange favours her aim. We do not want the high rate to continue, as it is damaging our export trade-.and our financiers are in no way responsible." New Zealanders will be well advised to pay for the whole of their travelling at Auckland or Wellington, or other booking office, as the Union Steamship Company proceeds, on the basis of the normal rate of exchange. On arrival at Victoria,: 15.C-, a number of travellers found it necessary to pay for tho balance of the journey. Not only had the fares gone up in the meantime, bnt the officials of the Canadian Pacific Railway Company would only give 4.35 for gold, whereas Cook's offered 4.83, and all- the trading banks 4.85 to 4.90.