The effect is that we pay three dollars in gold in New York and get two
dollars of gold credit in Spain. Our money buys fifty per cent. less
than it ought to. The same thing is true, of course, of a British pound
sterling and of the French franc. It is perfectly obvious that this
rate of exchange is imposing a ruinous cost upon the United States and
the Allies—just to the extent that they are compelled to buy pesetas
at this rate for the purpose of making purchases in Spain. It must be
remembered also that the prices in Spain are on a war basis—in other
words, that commodities have nearly doubled in price, even in terms
of Spanish money so that the fifty per cent. extra which we pay in
gold for Spanish currency is in reality doubled, and this exchange is
thus actually costing us nearly one hundred per cent. In the meantime
to correct this our country has adopted the questionable policy of
imposing an embargo on the shipment of Spanish goods to the United
States, or the buying of Spanish goods by American merchants. The
effect of this is that olive oil has gone from two and a fraction
dollars a gallon to eight and ten dollars a gallon, as every American
business man should know. The commodity embargo policy is undesirable,
for there is a much better policy available which I wish to point out.