Dollar (Almost) for Dollar

Over the past eight years, U.S. tourists in Canada have had to grow accustomed to the irritating fact that their dollar has been worth as little as 95-c- in Canadian currency. Last week the value of the U.S. dollar skipped up to its highest point in two years: 98.6-c- in Canadian funds. The narrowing gap between the two dollars reflected a drop in the volume of U.S. investment money entering Canada, which creates a demand for Canadian currency and raises its price in U.S. money. Some bankers were predicting that the two dollars would reach parity this summer.

Ironically, parity was coming just as Canada had solved the worst inconvenience of imparity. Because coins were considered too much bother to discount, U.S. silver has normally been accepted in Canada at its face value. But six weeks ago the volume of incoming coins had reached such proportions--20% of all silver in Canadian circulation--that Canadian banks imposed a discount on U.S. coins--e.g., 2-c- on a quarter, 4-c- on a half dollar.

Last week signs on buses and vending machines made it clear that Yankee coins could go home. Professional coin runners, who used to buy $100 of U.S. silver at border cities with $95-$97 in Canadian currency and then truck it legally across the border, were trying other ways to make a fast dime. The royal mint in Ottawa worked overtime to make enough coins for Canada's needs, for the volume of circulating U.S. coins was down by nearly 90%.

If and when the dollars reach parity, Canadian banks may well forget about their coin discount. No one wanted to scare away the visitors, who spent about $350 million in Canada last year. Said one broad-minded British Columbia vending-machine operator: "All I want is coins."

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