The New York herald., 1921-11-16
BOOM IN FOREIGN
TRADE FORECAST
Rise in Exchange Follows
Proposals for Naval
Holiday.
POUND NEARS 81 MARK
French Francs and Italian
Lire Advance and Sta
bilization Likely.
Special Despatch to THE New YORK HERALD.
New York Herald Bureau,
Washington, ID. c., Nov. IS.

Special Despatch to THE New York HERALD.
New York Herald Bureau,
Washington, ID. c., Nov. rs.
Wealth In the shape of increased
foreign trade is being headed toward
the pockets of American business men
as a result of the Conference on the
Limitation Of Armament.
Foreign currencies are soaring as a
result of the general acquiescence on
The part Of visiting delegates to the
naval holiday proposed by Secretary
of State Hughes. The British pound
nearly touched the 81 mark the day
the conference opened. French francs
and Italian lire are up slightly.
A rise in the value of foreign cur
rency means more orders for Ameri-
can mills, factories and mines, because
IT lowers prices of American merchan-
disc abroad without affecting values
Of these same goods in this country.
The beginning Of the working out of
the naval holiday plan, if it is finally
adopted. will boom American trade in
every section of the United States. Of
fcials said here to-day.
Foreign exchange markets are being
watched carefully by officials of the
Federal Reserve Bank and of the Treas
ury Department. The general level of
all foreign currencies advanced nearly
10 per cent. last month, according to
the index of the Federal Reserve Board.
a much larger advance Is expected to
result during November. The exact
measure will not be known until the
first week in December, when the board
publishes new index figures.
The average value of the British
pound sterling was 70 per cent. of par
~ compared with the dollar during
- tober, according to the Federal Re-
We Boards index. During the pre-
vious month the average was 66 per
cent. of par. The average for italian
lire went to 201a Per cent. during the
month, Netherlands currency to 80 per
cent. of par. Canada 81 per cent.
Sweden "a per cent and Argentina 76
per cent.
Profits totalling millions were made
by American spectators as result OF
the advances. Many American business
men hastily began paying their foreign
obligations. Some had been waiting for
a drop in foreign exchange. Although
these suffered a theoretical loss the
number of profit takers was known to be
very large.
Secretary OF the Treasury Mellon and
Assistant Secretary Wadsworth are
watching the exchange markets because
they determine largely conditions for
collection of interest on more than
$4,000. 900, 900 due to this Government
from foreign Governments for cash lent
during the war and for supplies sold
after the war on credit
Increasing values for the pound
sterling, the franc and the Ira mean that
England. France. Belgium and Italy will
be in a better position to plan to meet
their obligations to this Government
when authority to fund the foreign loans
is granted by Congress. For the Gov
ernnents to go into the foreign exchange
market. in which their money was greatly
deprecated, and buy s500.000.000 with
which to pay interest would upset values
and cause havoc in international finan-
cial circles. Had this been attempted
a few months ago. Treasury officials say
when the British pound was selling al
less than SO, Americas foreign trade
would have been almost completely
halted The dollar would have been
forced to such value that the world
would have been prevented from buying
here. Under present conditions. Treas
ury officials say. the exchange market
givee promise Of ultimate stabilization
A situation in which the collection OF
the foreign interest changes will be pos
sible without danger of loss to Amer
lean business men and American con
Germs