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Southland Times, Issue 22073, 21 July 1933, Page 2

FOREIGN EXCHANGES. (British Official Wireless.) (Rec. 5.5 p.m.) Rugby, July 19. The following rates of foreign exchange are current to-day compared with par:—

BRITISH WAR LOAN. (British Official Wireless.) (Rec. 5.5 p.m.) Rugby, July 19. The war loan 3J- per cent issue is quoted at £9B 13/9. DAIRY PRODUCE PRICES. Messrs Henderson and Co., Ltd., report having received the following cable dated July 20, from their London principals Messrs Trengrouse and Nathan, Ltd.: “Cheese: White 48/6, coloured 51/-. Market firm.” The New Zealand Loan and Mercantile Agency Company, Limited, report having received the following cablegram from their London house:— Butter: New Zealand 78/-, 79/-. Firm. Cheese: White 49/-; coloured 50/-, 51/-. Market firm. LONDON STOCK EXCHANGE. PRICES IRREGULAR. (British Official Wireless.) Rugby, July 19. Stock Exchange prices displayed some irregularity and business was less brisk. British funds were firm. The War Loan is quoted at £9B 13/3 . LONDON WOOL SALES. PRICES EASIER. (United Press Assn.—Telegraph Copyright.) London, July 19At the wool sales 9320 bales were offered, including 4341 from New Zealand. About 4092 were sold. The demand showed slackening signs as buyers have filled the bulk of their requirements. Withdrawals were more numerous and the trend of prices was easier. New Zealand greasy halfbred “Ivy Villa” top price 13>}d; greasy crossbred “SM/r2” 12|d. CANADIAN WHEAT. DROP IN PRICES. (United Press Assn.—Telegraph Copyright.) Winnipeg, July 19. Wheat: Values crumbled under pro-fit-taking to-day, closing at 6f to 7 cents lower. July was quoted at 87-J cents, October at 89’, December at 91J, and May at 95| Wheat broke as much as thirteen cents in Chicago. THE DOLLAR QUOTATION (United Press Assn.—Telegraph Copyright.) London, July 191 The dollar is quoted at 4.86 J. I PRICE OF GOLD. (United Press Assn.—Telegraph Copyright.) London, July 19. Gold is quoted at £6 4/4 per ounce'. INFLATION IN UNITED STATES. BANKING JOURNAL’S COMMENTS. The current issue of the Guaranty Survey comments as follows on the powers assumed by President Roosevelt in his effort to cope with the situation in the United States:— “While the outlook for American business is conditioned on many intricate national and international factors, the chief uncertainties in the nearfuture economic prospects in this country centre around the discretionary inflation powers granted to the President by Congress. The uncertainties do not exist alone because the outcome and ultimate manifestations of a programme of inflation are necessarily indefinite, but also because there is no way of telling whether or not the President will use all or part of his powers along this line. “The ‘inflation’ amendment to the Farm Relief Act confers upon the President broader and more sweeping monetary powers than have ever before been delegated to the executive in times of peace. Thus far, however, the powers of inflation placed in the hands of the President have not been used in any appreciable degree; the advance in security and commodity prices since inflation became a legislative possibility is due to an actual upturn in business levels and the rush to purchase commodities and securities in the fear that the inflationary powers will become operative. The Administration’s declaration that an inflationary movement will be launched only if it is deemed necessary offers no indication of what set of circumstances might be regarded as warranting this monetary programme. However, the statement leaves little doubt that the Government is reluctant to set the machinery of inflation in operation and that if it is fully aware of some of the unhappy experiences with inflationary programmes in various periods of the world’s financial history. “The case of Germany, of course, is an extreme example of the workings of an inflation, but for this very reason it offers a pertinent illustration of the dangers involved in this financial expedient. Even though the financial experiences of most European nations after the war were not nearly so severe as those in Germany, they all point to several indisputable characteristics of inflation. In essence, inflation, whether it is brought about by huge issues of Government bonds or more directly by paper money not backed by the usual reserves, is strictly public borrowing in its most dangerous form. The issuing of paper money to pay Government obligations places a nation in a debtor position, inasmuch as the money represents a Government obligation to make eventual payment in specie; and, regardless of the indirect manner in which debt is incurred, the forced loan must eventually be paid. It can be discharged either by heavy taxation to redeem these notes (which generally proves impossible where the inflation has proceeded to great lengths) or by repudiation through a reduction in the gold content of the money unit. “One of the insidious elements in inflation is that in its inception there is usually a sincere intention on the part of the Government to limit and control the process, but experience in the past offers no evidence that'inflation is subject to regulation or that its effects can be readjusted without serious disruption of the economic life of the nation involved. If inflation can be brought about inadvertently by over-

Par. To-day. Paris, fr. 124.21 85 1-32 New York, dol. 4.866 4.82J Montreal, dol. 4.866 5.00 Brussels, belga 35.00 23.834 Geneva, fr. 25.22 17.211 Amsterdam, fr. 12.10 8.24 Milan, lira 93.46 63 1-32 Berlin, r.m. 20.42 13.95 Stockholm, kr. 18.159 19.40 Copenhagen, kr. 18.159 22 3-8 Oslo, kr. 18.159 19.90 Vienna, sch. 34.585 30 nom. Prague, kr. 20.02 1121 Helsingfors, mark 124.23 226£ Madrid, kr. 15.225 39 13-16 Lisbon, escu 4i 110 Athens, dr. 370.00 585 Bucharest, lei 25.225 565 Belgrade, kr. 245 Montevideo, dol. 45.57d 34 nom. Buenos Aires, dol. 45.57d 42 Rio de Janeiro, mil. 4.898 4 Bombay, rupee — 18 1-16 Shanghai, tael ——— 15g Hong Kong ~ 17 7-16 Yokohama, p. to yen 24.582 15