THE EXCHANGE CRISIS.

Manawatu Standard, Volume XLIII, Issue 1735, 9 February 1920, Page 5

THE EXCHANGE CRISIS.

REACTING ON AMERICA, By Electric Telegraph.—Copyright. _ Australian-New Zealand Cable Association, NEW YORK, Feb. 6. The Chicago Institute of American Packers has announced that the demoralisation of tlie exchange rate has resulted yi a largo decrease in European purchases of American meals, especially during Jana ary, when purchases ceased almost wholly, li, is believed that a reduction in the price in packing house products in America is inevitable. OTTAWA, Feb. 6., A message from Winnipeg stales that the-Board of Trade, the Bankers’ Association, wholesale merchants and women s organisations have unanimously resolved to tease buying American goods'in order to check the disastrous discount on Canadian paper, and buy British goods instead.

Owing to the increases in cost resulting from iho unfavourable rate of exchange, jiul also the increased cost of transport and packing materials, the price of petrol has Keen increased at each port as from February 6. An Auckland merchant discussing the effect of the. heavy exchange rates with America, said the consoling feature of tin situation was that we were being taught an expensive but much-needed lesson that we should trade within the Empire as much as possible. It would be interesting to know how much non-essential imports from America have contributed to the position. The United States is a great country, but tho British Empire is greater. The financial despots of America are powerful, but the financial strength of Europe is more powerful, provided wo act with an eye to the stability of the Empire. Britain is still warweary, but her heart is sound, and the national characteristics which shone in the war will rise to the present occasion. She will not, always pay tribute to the United States. For my small part my orders will be kept a-s far as humanly possible within the Empire. Referring to tho effect of the present rate of exchange as far as New Zealand is concerned, Mr Harold Beauchamp in a recent interview said; Tho position is affecting us, because we are importing such large quantities of goods from America, particularly from the Western States, in tho way of petrol and so on. But. on the other hand, of course, it may be found that America will require a large quantity of our primary products—pelts, tallow,_ and probably a certain quantity of kauri gum, and also more hemp in the near future; arid that will assist us in buying goods from America. That is our advantage as a country exporting primary products.