Exchange Crisis.

Hawke's Bay Tribune, Volume X, Issue 46, 6 February 1920, Page 5

Exchange Crisis.

A DISASTER THREATENED. UNLESS REMEDIES APPLIED. COTTON IMPORTS STOPPED. WHOLE INDUSTRY MAY CEASE ( By cable.—Pram AModation.—Copyright.) London, Feb. 4. At yesterday’s Finance Conference the exploratory character of the attempts at a solution of the exchange crisis by legislation was deprecated and the possibilities of controlling imports by licenses suggested. Sir Vassar Smith, chairman of Lloyds’ Bank, who was present at the conference, in a speech at the annual meeting of the bank yesterday, said that unless remedies were promptly applied he feared the gradual and persistent spread of bankruptcy and anarchy must ensue. It is anticipated that Cabinet will come to a decision quickly, but the question will be raised at a meeting of Parliament in Tuesday’s debate. Meanwhile effects upon the cotton industry illustrate the likelihood of all sections of the community suffering most severely, i Yesterday’s dollar quotations brought the cotton import business at Li v«*i pool to a complete standstill. Importers have begun to re-ship cotton to America. The matter is most serious for the operatives, because present stocks will be exhausted in ten weeks. WALL STREET PANICKY. ATLANTIC FREIGHTS DROP. EXPORTERfFwANT GOLD. (Received 6, 9.40 a.m.) New York, Feb. 4. The exchange market is verypanicky to-day, the sterling exchange rate reaching an unprecedented low level of 3.19} dollars, but later recovering to 3.25. The stock market reacted sharply. Virtually all issues are selling at large losses. Cotton fell off 25 to 100 points on the report that Britain had stopped cotton imports. The exchange situation has caused a drop in ocean freight rates. The rate for carrying wheat across the Atlantic was 75 cents a cwt. in 1919, but space can now be obtained at 35 cents. There is a hope expressed that the British Financial Conference will remedy the exchange situation. Exporters here believe it will be necessary for England and Franc*? to release large gold stocks before the exchange market can be stiffened. — (A. and N.Z.) SLIGHT RECOVERY. New York, Feb. 4. The sterling exchange has recovered to 3.25. TIGHTENING THE REINS. REDUCTION OF PAPER MONEY. (Received 6, 11.35 a.m.) London, Feb. 4. The “Evening Standprd” says that as a result of the Finamre Conference the holding of an international conference will be recommended, and probably held in London or in Paris if more convenient. It is understood the Treasury has decided to reduce paper money flotation by 20,000.,000 and further decreases will be made. Bankers have decided to keep a tight hold on advances until credit is improved by increased production and economy.— (Reuter and A. and N.Z.)