Evening star., 1920-03-13
CANADALESSENS
BUSINESS W|THU.S.
BY RECENT ORDER
Finance Minister Temporarily
Ends Cash Trading With
American Exchanges.

| Discontinuance in Canada Of the pur-
chasing. for cash, of foreign bonds.
| STOCKS and other securities, effective
February o6, under an order issued by
Sir Henry 1rayton, the Canadian min
lister of finance. is held here to amount
almost to 4 virtual stopping of trad
! ing IN securities and n lcssening to
great degree Of the business between
| the United States and Canada
ohder the order trading with Ameri-
! can exchanges for cash has come to
! an end temporarily. although there is
no restriction against buying on mar
gins except that imposed by adverse
,.N'h2nge The action of the Canadian
linanre minister. it is explained was
| forced by the extremely unfavorablc
! trade balance of Canada with the
nlted states and the flooding Of the
'anadlan security market with bonds
ana stocks from Britain under which
lHe sellers are said to have reaped n
handsome profit owing to the premium
on tn" Canadian dollar
Further Action Anticipated.
IN connection with the issuance of
me chlct against purchase of securi-
tieS IN canada it is reliably reported
,hat lu" aer governmental action may
I pe l"oN "I Tor III the near future placing
rSStrIctn's against the Importation of
loN-"SS"ntialS. especially from the
,n.'ei states. since up To the end of
! :, an uarF. Notwithstanding the un-
favorable exchange rate. imports from,
inc United states showed no decline
The Canadian governments action
also includes the diSCouraging of is
sues of securities for uon-tssential
purposes within the dominion 1t is
reported that the Bond Dealers ASso-
cation and the Montreal and Toronto
exchanges have agreed to respect The
wishes of the government to th.. full
est possible extent. Notwithstanding
the serious loss of business; tina. will
result to bond houses and stock
brokers.
Newspapers support the Measure.
The Canadian newspapers with few
exceptions. appear to be generally
disposed to support the governments
action on the principle that any
legitimate movement calculated to
bring about the amclioration of ex-
chanse conditions is deserving of con-
Slderation. one newspaper. while sup
porting the measure. shares the belief
that the exchange situation could, if
desired. be satisfactorily adjusted in
the United States and remarks that
the money America made in the war
could be prohtably spent in rectify
ing thG-cte Of exchange"
In the event that the Dominion gov
ernment should deem it necessary to
resort to compulsory restriction of
imports of certain luXuries from the
United States the American consul at
Hamilton believes that such action
would be taken purely as Il safe
guard to the stability of its national
currency. He believes that it would
in no wise reflect the spirit of unrest
said to be frequently voiced by the
people against what they regard as
the unjustitiable decrease in the value
of their money in the United States.
Meanwhile. says the consul, it is
hoped that some means may be found
in the United States to assist the
Canadians in the perplexing task
which confronts them of effecting a
more favorable trade balance with the
United States. "Obviously," he says.
the most logical method for accom-
piishing this end is through increased
production and expectation. rather
than by curtailment of imports. which
latter would mean loss of customs
revenue to the Canadian government
and loss of trade to the United
States.
Suggests Lower Exchange Rate.
What would prove most helpful to
Canada and at the same time protect
the United States against the loss of
"A large part of its export trade with
Canada, would be substantial lower
ing of the present exchange rate OF
about 1G per cent. Numerous instances
have been cited of American export
ers recently Offering to accept pay
ment for their merchandise in Cana
dian money at par. Admittedly this
could be done in certain lines of mer
chandise. where the margin of profit
is relatively small. but a more gen.
era1, concerted movement in that di-
rection would prove to be a far
sighted policy as a protective measure
to American trade with Canada and
would be mutually ADVANTAGEOUS to
the commerce of both countries
The consul at Hamilton suggests
that the matter be brought to the at
tention of the United States Chamber
of Commerce with "A view to obtain
ing early consideration by that body
of any merits the plan may possess.