New-York tribune., 1922-07-23
WI hefs dTIU Ohe PUBLIC OF
Centralized Credit
Money System Handicaps Chile
business Showing Many Encouraging Aspects, How
ever, Despite Serious Difficulties Of I'm
convertible Paper Currency

iftt1Ci orc t5H Financial COrrcsponncscc
SANTIAGO. Chile. June 2i.-Cbilean
bus us'noss. in spite of the confusion and
complications. which beset it. is max
ing a determined effort to right itself.
Since the tremendous setback which
IT experienced in the latter part of
l920- which was net, IN so often i'm
ruted. entirely due to overstimulation.
bad management and lack Of foresight
in not taking advantage of favorable
conditions then prevailing, to place
finance and commerce on stable basis.
cut was IN large part direct reflec-
tion Of the general economic brc ak :
down abroad 1t he's gone through va
rious stages of Encouragement and
intermittent hope.
| 1t has, and will continue to have, to
cope with an unfortunate monetary
| system. OF unconvertible paper cur.
rency, which has had much to do with
! it's difficulties. This system. even now.
after the many lessons which the coun-
try has received throurh il, seems fur.
ther than ever from being rectifed. all
though, in justice, it may be said that
various proposals for the establish
mcnt of central bank of issue and
control Rave been introduced and dis
/ cassed in Congress from time to time.
Instability Of the currency encourage !
speculation in exchange en- the part of
I'll classes, from professional fnan-
ciers end owners of some Of the coun-
try's largest industries to small i'm
portars and traders.
The direct result of q recent wave
o. this spirit Of speculation has been
the artificial raising Of tne valae OF
Chilean paper peso from a value of
l1.50 to the dollar several months ago
to 7.o0 to the dollar. This seeming in
crease in the worth OF the currency ap~
parently has little relationship to any
sctual Improvement ntrade, and is
therefore considered by many students
cf economic conditions in Chile to be
premature and the forerunner Of an
ether slpnp 1t is fumored that the
present situation has been created by
in future sales and through sales by
American investors of large sums OF
| American dollars in order to purchase
Chi.ean securities which have been Of
/ fercd at very favorable rates and which
they will undoubtedly be able to dis
pose of later on st good profit. 1t
is a'so rumored that large American
| interests in Chile have been converting
/, huge sums in dollara into pesos, with
/ which 70 ever their running expenses
! for the coming year.
i In addition to this, there has recent
! ly been discussed in Congress project
| Ter ilsating another foreign loan in
| England Of sor,c 25,o00.oo0, needed to
cover the nationai deficit and afford
! the means for carrying out various
constructive projects. 1t this is event
va ~ authorized and put through the
| inevitable flooding OF the financial mar
ket with sterling drafts Is expected to
/ further enhance the value Of the peso.
| Thare seems little doubt. however,
| but that, after the effects Of sll this
fartifeial stimulation hrve had timc to
| ;yoar Of. the peso gin fall again to a
progress Of business ii Chile.
/ Tfi1 brings Us back once more to the
questian OF progress which Chilean
! .'.seeg u e-eneral u r1ski.s~ II IS, .