Evening star., 1932-10-22
CANADIAN DOLLAR
SHOWS STRENGTH
Recent Business Improve
ment in Dominion Points
to Trade Recovery.
Special Dispatch to The Star.

Speclal DlSpatcn 10 Tne star.
NEW YORK, October 22.-The i'm
proving status of Canadian dollar ex-
change has been one of the important
developments in the international
money market recently. While it is
somewhat due to seasonal conditions. 1t
reflects fundamental Improvements and
is in q degree allied with the recent
tariff program adopted by the Dominion
government.
A week before Great Britain went
off the gold basis Canadian exchange
was quoted at a nominal discount.
Shortly after this world disturbing epi-
as 20 per cent and unoficially about %
per cent At the same time the dis
count on sterling was over 80 per cent.
Canadian exchange continued to sell
well under par and for months ruled at
a discount of about Is per cent. AS
late as the first week in August Mont
real funds were quoted at discount
of approximately 13 per cent. A month
later the discount had been reduced to
IL per cent. This was when 1t began
to show its first resistance to factors
that had been depressing it and when
an active demand commenced TO appear
from dealers in grain.
Increase In Discount.
At the end of last week exchange had
risen to discount OF about per cent.
Monday it was quoted around discount
of 6l. per cent. which represented an
extreme limit of recovery since the ~
per cent official discount in the Autumn
of 1881. Today Canadian dollars were
still gaining.
The leading influences responsible Tor
the improvement in Canadian exchange
are the heavy payments now oeing
made against Canadian grain delivered
five or six weeks ago and at a time
when Canadian dollars appear to be
scarce. Another factor is the COM
paratively moderate payments Whlch
the Dominion government now has 10
make in American dollars. These com
mittments are believed to be the small
est for this season in some years. Whlie
Canada has not had SO good a season
in its tourist trade, the balance oil
American spendings in the Dominion
over Canadian tourist outlayS in the
United States Is estimated somewhere
between sl75,00O, 900 and 5000. 0.000. 900
This again. as it has always between
July and october. played prominent
part in helping to stabilize the Cana
dian exchange market.
Still another cause operating for rls-
ing Canadian exchange is the S60,O0O,-
600 Canadian government one-year
loan which was fioated late in Septem
Der. Since this issue was placed there
has been a recovery of several cents IN
the dollar in exchange. While the new
tariff schedule has not yet had any
actual effect, there has been a certain
amount of sentimental reaction to il
ir the exchange market. as under il
Canadians will be paying fewer dollars
to exporters in the United States.
Coincident with the steady advance
since early September in Canadian ex'
change there has been corresponding
improvement in all Canadian govern
msnt, provincial and railroad secur-
tiles These have shown constant
improvement during the irregular
period in the domestic bond market
Of the past month. The gains in
Canadian government controlled anC
privately operated railroads have, tc
some extent, been due to the recon-
mendations made by the government
commission but also to the excellent
operating statements published by both
the Canadian National and the Cana
dian Pacific systems.
Business Improvement.
1t is not expected that Canada will
soon see her exchange recover to a
parity, but with Dominion finances
in such excellent condition and her
foreign trade situation improving il
is apparent that she has definitely
turned the corner and that there will
be no subsequent relapse to the status
of an excessive exchange discount such
as prevailed early this year.
(Copyright. 1922