New-York tribune., 1919-05-31
Net Gain of $21 Taken on
Every 500 Sent to France
and $40 ON Every 500
Sent Home by Italians
Rate Disparity Is Cause
Obsolete Law Is Inf1exible.
While Banks Sell Drafts
at Current Market Value

Each 800 worth of French exchange
bought at a United States postoffice
yields approximately las francs less
than can be bought at any of the New
York banking institutions dealing in
foreign exchange. The disparity on
italian exchange is even greater The
rates of exchange in foreign postal
money orders are inhexible; and have
remained fixed throughout the war,
when exchange has been subject to
erratic and sensational fluctuations.
The postoffice rates, A. NJ. Dockerv,
Third Assistant Postmaster General at
Washington, has explained, were fixed
by Congress in 1894. Until that bodv
acts again the Postofice is powerless
to change the rates. Business trans
acted by this branch of the Postoffice
Department averages approximately
100000 year gross revenue
Big Profit for Government
Relatives Of American doughboys in
Trance, prohibited by stringent regu-
lations governing the size of private
packages in the foreign mails and anx-
ious to send gifts, have made heavy
purchases of exchange on France
through the Postoffiee during the last
two years On all such purchases the
government made big profit.
The Tribune purchased last Friday at
the local postoffice money order that
calls for the payment in Paris to a
correspondent there of 515 francs, for
which it paid S100, plus fee of 81.
On the same day The Tribune pur.
chased for 500 from the Farmers
Loan and Trust Company draft on
Paris calling for payment to the same
correspondent of 662 francs, or lat
francs more than $l00 bought at the
postoffice. There was no fee. Through
the Empire Trust Company The Trb-
une purchased similar draft, also
yielding 662 francs, for 500, and with
out the payment of a fee. Another
Equitable Trust Company yielded 660
francs.
Makes S21 on the Hundred
The Postoffice is selling exchange on
Paris at the rate of 1914 cents apiece
fer francs, against normal exchange
value of 1913 cents per franc and a cur
fent open market quotation of about
is cents per franc. The difference be-
tween the Postoffice rate of 5.15 francs
to the dollar and the rate quoted by
the banks amounts to more than $21
for each 500 worth of francs. This is
apparently clear profit TO the govern
ment, as the 81 fee is supposed to pay
all overhead.
Officials at the local Postoffice TX
planned that they were compelled to
sell the exchange at the fixed rate of
6.15 francs to the dollar. A similar
situation exists with respect to ex-
change on England and Italy
The disparity between the posto q CO
rate on Italian exchange and the open
market bank rate is even greater than
IS the case with French exchange. The
postoffice will sell the purchaser 515
lire for S100, whereas any of the lead
Ing banks that deal in foreign exchange
will sell approximately $50 lire for
500.
$40 Profit on Each 500.
This is a difference of 335 lire on an
Investment Of 500, the equivalent at
mrrent rates of approximately $40.
The Italian people in this country
send large amounts of money to Italy
each year. The loss to them through
their purchases of lire exchange at the
pcstofice runs into big figures, and the
governments profit is correspondingly
great
The exchange rates, Postofiice off
Gals say, were fixed by international
agreements between the United States
and France and the United States and
England more than ten years ago. No
change has ever been made, despite the
fuctuations of all foreign exchange
since the war started.
The postof1ce rates were just as un