New-York tribune., 1920-10-31
Say Exchange
Rates Restrict
Foreign Trade
Observers Look for Slow
Recovery and Consequent
Dwind'ing Purchases in
q. S. Market for Years

Spectators who are holding German
marks and Austrian crowns purchased
at low levels for recovery to par In
the hope Of large profits can sympa-
thize with American exporters, who look
forward eagerly for improved condi
tions so that increased foreign pur-
chases here may be expected Observ-
ers Of world economic conditions, how
ever, predict long, hard pull for Euro
pean nations, particularly Germany and
Austria, in the rehabilitation process,
and for this reason recovery In ex-
change rates may be expected to be
slow.
Suggestions Of new issue Of Sin
ter-Allied currency" TO re used as a
world commerce basis, have been met
with opposition by economiscts, who
insist that there is plenty Of paper
money in circulation at present to care
for all contingencies, and wnat is need
ed is not more such paper, but in
creased production on the part Of ma
tions whose exchange has deprecated.
The trouble lies not in deficiency Of
money or bills of exchange, bu. in de-
ficiency Of goods, it is contcndej. In pIo-
portion that currencies are male con-
vertible into gold they will be increas-
ingly acceptable in exchange opLrs-
tions. This generally accepted theory
controls present conditions IN the cx-
change market
The extent Of depreciation OF cur
rency in European nations and the re-
sultant premium of the dollar is made
clear by glance at present exchange
rates. German marks, which normally
brought $23 80 a hundred, now cDm-
mand only $1.32; Austrian crowns nave
6windled from 5000 a hundred to
33 cents, and Rumanian lei nov bring
cnlv sl.61 a hundred, where they for
merly sold for $19 80. Russian rubles
are rot generally quoted, for the rea-
son that trade relations between Rus
sia and this country have not been re-
established since the war, and for the
additional reason that Russia has been
flooded with so much paper money that
it would be difficult 10 arrive at q
satisfactory basis for determining the
value of the ruble in American money
The depreciation in Russian money
has gone to such an extreme that the
old ruble, which normally was worth
about 90 cents in exchange, is virtually
worthless. What the chances Of re-
covery are no one cares to predict, for
too many political complications enter
into the situation besides the ordinary
economical phase. Russia's great nat.
ural resources should materially assist
in bolstering her credit when foreign
trade is resumed, for that county has
much to offer the world in the way OF
raw material Yet many financial prob
lens must be solved before a stable ex-
change basis can be reached. In the
due course Of time it is reasonable tc
suppose that the ruble will come back
but no one can say for certain whether
it will ever reach its old parity.
AS for Germany and Austria, the sit
uation is almost as complex, lndem.
mites to be paid to the Allies viii
restrict foreign trade for many years
thereby keeping down credit Of thu
former enemy nations. Consequently
deprecated exchange must be expected
to continue until the nations have re-
covered economically to the point wher'
trade balances begin turning In thei1
favor. Then credits will improve ant
exchange rates rise. ~