New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1918-04-04
Dutch Co. May Be
Avenue for Getting
Money to the Foe
Kent Understood To Be
Investigating Deals That
Aroused Attention

The attention of Fred !. Kent, d.
rector of foreign exchange of the
Federal Reserve Board, it was learned
yesterday, has been called TO the pcs
slbllltles offered German interests in
THIS country for transferring funds
to Germany through the medium of
purchases Of Royal Dutch Company
shares listed on the New York Stock
Exchange. The company is one OF
the most important oil concerns in
Europe. Bankers connected with the
original notation OF the Royal Dutch
shares here would not confirm a re-
port that the Germans had been en-
ploying this channel for getting
funds through 10 Germany, although,
It was admitted that operations of
this kind We're feasible.
In the fall of 1916 Kuhn. Loeb &
Co. formed a syndicate which under
wrote an issue Of $4,000 shares Of
the Royal Dutch Company, which was
sold to American investors and the
stock admitted to dealings on the
New York Stock Exchange. The dol
lar shares issued here were secured
by the deposit in Holland in the name
New York as trustee of $4,000 shares
OF 100 guildcrs par value each Under
normal conditions the guilder stock
would have been sent to the United
States and deposited here. but this
vas impossible owing to the risk at
tachcd to shipping the securities
across the water and also to the fact
that in case of loss the stock could
not be replaced until year and a
half had elapsed.
Stock Sold in New York
The stock was sod here to investors
around $50 to $40 share and since
then it has enjoyed fairly active mar
ket on the Stock Exchange, the cur
rent price being in the ncighborhood
OF SD. In recent months, it is learned
on excellent authority. there have been
purchases Of the stock in this market
by interests who had it cancelled here
alcnt value in the guilCer stock hc,d
On deposit in Holland
Vow much of the dollar stock bought
here has been cancelled in this man
ncr and how much Of the guilder stock
deposited in Holland was released is
unknown. Officials Of the Equitable
Trust Company, in whose name the
stock in Holland is held, would give
10 information on that point vcster-
day. 1t was learned, however, that a
considerable amount of the cuilder
stock had been released in Holland.
Realizing the possibilities offered to
Germans here who wanted to remit
iunds to Germany and who have found
1T impossible 30 use tho ordinary chan
nc!s OF foreign exchange, the Federal
Reserve Board at Washington recently
became interested in the matter with
the result that Director of Foreign Ex-
change Kent is now said to be scrut;-
nzlng carefully all transactions Of this
character. 1t is pointed out that it
would be an easy matter for any one
here to buy tho dollar stock listed here
have it exchanged for the gullder stock
IN Holland, and then to take the latter
and sell it on the Amsterdam Stock
exchange, completing the operation by
sending the money obtained from the
sale of the stock into Germany.
1t is asserted that in one instance at
least German here tried to put
through transaction of this kind. He
was blocked, but whether there were
large transactions of the kind before
the Federal Reserve authorities stepped
in has not been asccrtained
The Royal Dutch Company is CAPT
taliZcd at 100000 guilders (about
S30,O00,0O0) Of common stock and 30
100000 guildcrs (about $4,000, OoO) Of
preferred. The market price of the
stock has been far above its par value.
The $4,000 shares of gulder stock de-
posted in Holland against the 222 900
shares Of dollar stock issued here, were
worth 100000 gulders, par value, or
about 100000
What Bankers Say
Bankers with a knowledge of inter
national finance said yesterday that it
was possible that some OF the transac
tons which involved cancellation of the
stock purchased here in exchange for
gulIder stock released in Holland NAV
have been put through by brokers who
sought to profit from the fact that the
Amsterdam quotation for the guidcr
stock has at times been considerable
above the New York quotation.