DOLLARS BALANCED.

New Zealand Herald, Volume LIX, Issue 18247, 14 November 1922, Page 5

DOLLARS BALANCED.

SATISFACTION IN CANADA.

EFFECT OF NEW TARIFF. VALUE OF TOURIST TRAFFIC. [FROM OUR OWN CORRESPONDENT-] TORONTO, Oct. 14. A Toronto street car conductor the Other day. refused to accept a United States one dollar bill proffered by a passenger, .on the ground that it was worth one thirty-second' of a cent less than one dollar —and he had to protect his employers, Thq, passenger oomplained to the management, and the conductor was reprimanded. But to the general public that conductor has become something of a hero. The Canadian dollar has been humiliated for so long that rejoicing, and perhaps some retaliation, is now to be expected from' human nature.

No one expects or would desire that the American dollar will be subjected to anything like-the indignities that wero for a time heaped on Canadian currency, when it went to a discount of. 16 or 17 per cent. Everyone knows that tli6 discount on the American dollar cannot go very far in Canada. Uncle Sam has plenty of gold, and as it costs only about one-sixteenth m expenses and insurance to ship gold from Washington to Ottawa, any discount in American funds exceeding or equalling onesixteenth will no doubt be followed by gold shipments to ebver the adverse balance. • Nevertheless, the present situation gives universal satisfaction, which will be increased if the next development is a movement of gold into Canada. What has brought the Canadian dollar back to par so quickly ? ' The new United States tariff helped, no doubt. It is true it cut off Canadian exports to the United States, and to that extent was designed to increase the discount on Canadian, currency. But in its final effect it cut off more United States exports to Canada than it did Canadian exports. The ship that, was requisitioned to carry Canadian exports abroad—entrance to the United States being denied—simply had to find a return cargo, and that return cargo gener ally replaced American goods. ,In addition, the public, including merchants and importers, " got their dander up," and influenced by advertising and otn:r propaganda refused to some extent to buy American goods. The latter £ condition will, no doubt, prove to bo temporary.' fiut the former condition will prevail and develop iust as long as Canadian exports are excluded from American markers. The motor tourist has done his share to bring the Canadian dollar back to par. During the last calendar year more than 600,000 American motors entered Canada for touring purposes. 'If they averaged seven days each and spent £5 a day the total exceeds more than £20,000,000. These expenditures do not appear in trade returns, but they affect the balance of. trade just as much as though they represented trainloads of wheat or of steel bars.

But perhaps the most important influence is the fact that the ordinary amenities of international trade have been restored. When the discount on the Canadian dollar was at its highest, Canada's trade balance was never better. But her surplus of exports was with Europe, and her surplus of imports was with the United States. She could not use her credit in London to discharge her obligation in New York. Now she can do so, and the Canadian dollar again correctly interprets Canada's trade position—not with an isolated customer, but with the world. Partisans, of course, think the present situation is due to the return of a Liberal Government to power.