The sun., 1919-10-14

exchange, together with those farslShted
enough to realize that even II they gain
at the moment II Is at the expense OF
Aheir Canadian customer and that some
time in the future 1t will be their turn.
Therefore, in proposing ; remedy /
start from the admitted base that all un-
certainty is a handicap to trade; and.
just as the merchant insures his goods
against loss, so should he, and can he,
insure for himself the receipt OF the full
amount of his invoice, while the buyer
can and should insure himself against
the risk of having to pay greater
amount than he anticipated at the time
he purchased his goods.
To the American exporter who sells
for cash, to be paid In New York or
Chicago or nny other American city,
there is no risk of loss In exchange.
which Is shouldered by hts Canadian Gus
toner. His great risk Is that Of fe.csr
renetodl orders.
AS an illustration, assuming Gas was
the case, and win be AGAIN. that goods
can be manufactured equally well in
England, France or the United States
and laid down in Canada for S100
United States or It's equivalent on a
given date, and that the price Of 500
United States in Canada is 500 Cana
uian, with the chance of it's being sos
or $106, the goods have been resold and
| the account falls due, while the chance
is that sterling or francs may cost only
800 or s97 Canadian. the Canadian
buyer would actually prefer to buy
from England or France.
The American exporter must be pre-
pared to meet this condition by guar
ante ing to his Canadian buyer that his
United States dollars shall not cost him
more than a certain number of Canadian
dollars. To all intents and purposes
this Is the same as II he sold for pay
.nent in Canadian dollars. SO that now
the two problems become Identical.
The American exporter cannot guar
antee his customer any rate Of ex,
| change unless he himself Is guaran.
teed, nor can he be certain how many
dollars United States he will receive
per 800 Canadian unless by some
method or other he has contracted with
a bank to buy his Canadian dollars al
n certain price. delivery to be made a,
his option over a certain period. Thit
period should be made broad enough &c
cover the times when the accounts fall
due and funds In settlement should have
been received.
Banks Can Give Relief.
II the unforeseen should happen ant
the accounts still be unpaid. an extern
sion of time Of delivery could be mad,
for very nominal charge or even non,
at all. A we'll equipped bank can &C
complish the desired result by man,
different methods OF finance. suitable t.
the various trade customs and also t.
4 the needs of the individual firms. bu
these methods are too numerous ant
technical to be detailed here
With the American importer Of Cana
dian goods the reverse condition exists
with an equally varied assortment o.
remedies. II is beyond the power o.
any institution to finance all the expor
and import trade between this country
and Canada; neither. az regards rate,
of exchange. IL II possible for any bani
10 satisfy completely both Its expor-
and import customers II they match tn,
orders OF one against those of the other
But II Is possible for a bank In actua
contact with the foreign exchange mar
ket OF the world to provide al its Gus
toners with absolute protection agains
unforeseen loss in exchange by "bridg
ing over the period between date o.
acceptance OF order and that of pay
ment for the goods.