The Fiji £.

Chance For a Shrewd Financier.

From Our Own Correspondent.

Suva, May 2.

FROM ‘‘The Sydney Morning Herald” one notices that quite a traffic has sprung up in Sydney in Fiji cur rency notes.

The average quotation for Fiji £1 notes seems to be about 21/9 and 22/-.

However, the quotation varies accord ing to the individual needs of the cur rency brokers. The position is purely an artificial one, as it is believed that the banks will only give par.

On the other hand, Suva cheques passed through Sydney accounts of old customers of the banks are usually cashed at 22/6 for every £ Fijian. For all practical purposes, the exchange rate is a blocking one.

In Fiji, we are on the same basis as New Zealand, although if we chose we would have every right to insist that our £ notes are worth just as much — if not more—than the English £ note.

For example, the Commissioners of Currency in Suva published in the Fiji Royal Gazette a statement of the posi tion of the currency at April 11. The notes in circulation were given as £378,883. Against that, as security, was held no less than £83,882 in actual coin of the realm, practically all gold; and a portfolio of investments forming what is called the Note Guarantee Fund. These cost the colony £357,643, whilst their latest known market price is £371,350. Their face value, of course, is greater, and is £409,402.

The investments are in dominions and colonial securities, and we are somewhat relieved to notice that there is only about £3,700 in Australian Gov ernment stocks, which have a face value of £6,500.

None, thank Heaven, are in New South Wales!

On the other hand, we have invested approximately £28,000 in New Zealand loans.

The currency is obviously in an al most impregnable position, in that £441,500 of coin and investments are held against the note issue of £378,883.

There is an amount owing of £56,000 to the Colonial Treasury for advances, but this is off-set by a separate bundle of investments which are held on account of the Depreciation Fund. Their cost price and their latest known market price are approximately the same— £41,000 —whilst their face value is ap proximately £45,000.

EDITORIAL NOTE: A shrewd financier should see a chance of making money, on the facts disclosed in this interesting note from our Fiji correspondent. The Fiji £ note is—and has been for a year—at a discount, compared with sterling. Yet, on the figures disclosed, it is per fectly clear that the Fiji £ is equal in value to the £ sterling—even if the value of the securities has been expressed in a depreciated Fijian currency. There is reason for the de preciation of the Australian £, seen in huge Government deficits, insistent talk of repudia tion, and an overseas floating debt that has not yet been funded. New Zealand, also, is showing a severe internal deficit, and a somewhat un satisfactory oversea position. But Fiji, with definite reserves to take care of any adminis trative deficit or wrong trade balance with over sea countries, and with valuable securities to completely back her note issue, should suffer nothing in exchange. The arbitrary fixing of her exchange with London at around nine per cent.—that is, making the f in Fiji worth only

about 90 per cent, of the £ in London—is probably done as a deliberate policy, to help the primary producers of Fiji in these difficult times. It is, however, an open invitation to tho world to buy Fijian currency. Money placed in Fiji, in this way, probably is as safe as any where else in the world; and, when the exchange with sterling swings nearer to par—as, on avail able figures, it must do—the investor will collect a nice little profit. That, probably, is the ex planation of the purchase of Fijian notes, as reported by the S. M. Herald. Of course, money invested in Fiji notes bears no interest; but the banks everywhere to-day are holding huge sums on the current account of people who are too “windy” to invest in anything.