DOLLAR VERSUS POUND.

Auckland Star, Volume L, Issue 199, 22 August 1919, Page 5

DOLLAR VERSUS POUND.

THE INCREASING MARGIN. PROFIT .FOR AMERICAN TRADERS. The significant and serious position that confronts New Zealand in respect to the dollar exchange was vividly demonstrated to our representative by Mr. John Hooton, general manager of the 'Farmers' Co-operative Federation of New Zealand, at Wellington, who was passing through Auckland to-day. Mr. Hooton adduced some startling figures. He pointed out that on May 9 the exchange rate in New York for sight drafts on London was 4.(565 dollars for the pound. To-day the rate 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 oi view. It was pointed out by Mr. Hooton that, inasmuch that on May 9 of .this year £107 2/0 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 £121 4/3. In other words, goods being purchased by New Zealand from America cost 13_ ,pe*r 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 oteps, but' he .pointed oist that the st.eady increase! in the value of the dollar at the ex-' pense of the pound was due to the facti that, although the war was over,! 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 have 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 d'ispropor-i tion of the-British American trade. One 1 suggestion was -direct exchange of goods, and another the installation of :C New' Zealand banking establishment in New York.