The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-08-26
FALLING EXCHANGE
IRRITATES CANADA
Criticism of Banking System
Coming From United States
Not Relished.
Special Correspondence to the CGnddidn
Section OF THE SUN

special Correspondence to tho CGnddidn
Section OF THE SUN.
MONTREAL, Aug. sB.-Canadians are
becoming distinctly peeved over the re-
fsctions uttered in some quarters in the
United States about the depreciation Of
Canadian exchange. Those who under
stand the situation make no complaint
at the fact that Americans will only
pay 9b cents or less for a Canadian dol
lar-that is recognized as being a bust
hess condition for which there are per-
fsctly good reasons; but they do feel
hurt when the charge that Canada Is
not on gold basis" Is made in a man
ner To imply that this Is due to some
fault OF our banking or currency sys-
TEN which we could and should remedy.
Canada has plenty of gold to support
her own currency and to provide an
ample margin for the adjustment of
foreign balances II she could collect the
balances due to her in gold or in some
TORN convertible into gold without too
heavy loss. But for Canada to at
Tempt to settle her indebtedness to the
United States (her chief purveyor) in
gold, while at the same time receiving
no gold and no Immediately negotiable
securities for her own exports TO Great
Britain. would be absolutely suicidal.
That Canada is not on a gold basis ID
Que entirely to the fact that Great Brit
am her chief customer. is not on a
gold basis. The depreciation of Cana
dan exchange on New York Is the direct
result OF the much greater depreciation
o. sterling exchange on New York.
Canada's economic position Is per-
iectly healthy. She ls producing much
more than she consumes. She imported
IzS4,oOO.OOO worth OF goods in the four
months beginning April last. and she
exported 1858, 100000 worth of her own
produce in the same period. A largo
portion 81 her imports are on capital
account; that is to say, they will b
employed for the increase OF future pro-
1uetion, and they are largely paid for
by foreign capital loaned or invested IN
tahlua. But she is not getting cash
lot her exports. She Is accommodating
enormous quantities OF credit instru'
meH'7 Of British and other Governments
Ihc Finance Minister In his budget
speech in June stated that the British
government owed Canada at that DAFT
somo S2%o 100000 and this does not in
crude ~ further sum. probably almost
As great advanced 10 the same borrower
W mo Canadian chartered banks.
~ may DO said that despite her fila
relations Canada should not have al
lowed herself to become thus burdenet
with the I. o. Us. of another Govern
ment; that sho should have played he
own game alone and exacted the sam
@rms as, for example. the Unitet
states. To which It can only be re
plied that Canada was In the first plac'
.ar more dependent than the Unite'
states upon her export market in Brit
an and therefore less in a position Z
enforce terms about credits; and, Il
me second place, that Canadians grave
" doubt whether the American policy
leading as II has done to a heavy de
preeiation Of sterling exchange, is
eensheial policy TO the Americans them
selves. 1t would certainly not hay
ossn workable policy for q debto
country. an export needing country. hk