FINANCIAL NOTES.
Not the least satisfactory feature of the past few weeks has been the moderate improvement in the American exchange on London. Cessation of some special buying of dollars on French account, which had been proceeding for some time, is believed to have been largely responsible for the improvement, but there is little doubt also that the 4i per cent. Conversion Loan, tending as it has done to raise all British Government securities in price, has had its psychological effect, New York having on many occasions shown a particular readiness to note any influences favourably or unfavourably affecting British credit. Thus, for example, at the moment when a few years ago our Government finally ceased borrowing and began to effect economies, the effect upon the New York exchange was immediate. And still later, at the moment when Mr. Baldwin- concluded the- arrangement for funding our debt to the States, the effect was also to occasion an improvement in sterling, notwithstanding the fact that the settlement in itself involved heavy annual remittances from here to the States. * * * * Apropos of the improvement in the American exchange, the City has been a good deal impressed by optimistic note struck in the speech delivered last week by Sir Felix Schuster at the luncheon of the American Chamber of Commerce. Sir Felix said : " I shall not feel that we have won the War until the pound sterling is the same as pre-War parity with the dollar, and I do not see why this should not be brought about by the natural development and course of events before long." The City is in agreement with Sir Felix when he maintained that a parity between the dollar and the pound sterling exchange should lead to lowering the price of com- modities in this country, and particularly of raw materials and articles of food, while the cost of living would also be lowered and a stimulus would be given to confidence and enterprise. There is no doubt that both as regards international -exchange and the consideration of the thorny question of reparations, from the economic rather than the political standpoint, good work has been done by the newly-established International Chamber of Commerce. That body has been able to focus the views of bankers and business men in all parts of the world upon problems which for too long have depended for their solution upon politicians with their passing and often divergent interests to serve, as compared with the men of business in the various countries whose interests in so many of these problems are similar in character.
* ,* * Judging from the few observations which have been made by the Leader of the British Financial Mission to Brazil which has recently returned to this country, it is evident that optimism combined with considerable reserve and caution has been produced in the minds of the members of the Mission. On the one hand, the great natural resources of Brazil are recognized—Mr. Montagu, the head of the Mission, indeed expressing the view on the day of his return, " that it is quite possible with proper cultivation that Brazil will become one of the greatest sources of cotton supply in the world "—but, on the other hand, it is evidently per- ceived that the first necessity is an improvement in the stability of the currency, and that this stability cannot be attained until there have been some drastic fiscal and budgetary reforms. A. W. K.
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