LOSS ON EXCHANGE

Gisborne Herald, Volume LXVII, Issue 20384, 22 October 1940, Page 5

LOSS ON EXCHANGE

POPULAR MISCONCEPTION Apparently there are still people who believe that the banks charge £25 for “sending” £IOO to London, says the Australasian Insurance and Banking Record in its latest issue, in commenting on a suggestion that remittances of bombing raid relief funds to London should be made “without any deduction for exchange.” the first answer to such a suggestion. the journal says, is that the banks are already transmitting patriotic funds to London free of charge for their services, which is usually about 10s in £IOO. The second is that the banks have to pay £125 Australian for a £IOO banknote in sterling, and to ask them to sell it for £IOO Australian is unreasonable, to say the least of it. . Every intelligent person ought to know by now that the £25 premium goes into the pockets of exporters, who receive £125 Australian for every £IOO sterling worth of goods sold in London. The journal recalls a proposal made to English cricketers some years ago during a test tour of Australia that, in save losing £25 In every £125 of their earnings there when buying a bank draft, they should buy wool, shin it to London, and sell it there. The financial novice who thought of Ibis brilliant idea, it adds, was apparently not aware that £125 worth of wool in Australia would bring ohlv £IOO in L0nd0n..... . - -