New-York tribune., 1919-03-22
Italian Exchange
Drops in Market
Freed of Control
Lira Rate Slumps When All
Restrictions Are Re.
moved; Spectators Face
Losses Owing TO Decline

All artificial restrictions affectinf
dealings in Italian exchange in thi,
market were summariy lifted yester
day as the result of an agreement
reached between the Italian govern.
ment and the Federal Reserve Board
This step followed the action of the
British government the day before in
withdrawing support from sterling ex-
change and the move of the French
financial authorities in releasing the
franc market from control. All three
exchanges are now wholly freed from
the restraints imposed during the wal
emergency.
With the announcement of the free
ing OF the Italian exchange market il
became known that Domenico Gidoni
head of the Italian Institute of Ex
change, the Institution established b,
the Italian government to operate the
exchange market, with the assistance Of
the Federal Reserve Board, has left New
YORK Tor Italy, where he will confer with
the Italian Minister of Finance on fut
ure plans for meeting the new situa
tion.
Market Demoralized
The market in foreign exchange, al
ready upset by the swift decline in
Ehgi1sh and French exchange devel-
oped fresh Generalization yesterday as
y result Of the action with regard to
!tal1an exchange, and the value Of the
IRA, the Italian unit Of currency, fell
precipitately. For several months the
Italian Institute Of Exchange had held
tjle rate for lire bills around 81 rate
or 6ob lire to the American dollar
Removal OF the support from the mar.
ket saw al immediate decline and some
Dfokers quoted rate Of 7.50 lire to
lhe dollar Actually there was no mar.
kct, ior no one was willing to trade in
IRE bills because Of the uncertain state
OF the market. Predictions were made
that unless support was Forthcoming
again Italian exchange might fall to
below the level reached before the
market was stabilized, when a rate was
reached OF about $50 lire to the dol
lar. u''
After it was announced that the re-
strlctions had been removed from lire
the Italian Institute of EXCHANGE an
nounced it had reduced it's official rate
ifom $50 to 6.45, but the outside mar
ket paid no attention. Brokers we're
q. loSS 10 understand the present
status OF the Institute now that the
Federal Reserve Board has withdrawn
its support.
:. Spectators who accumulated a heavy
line OF Italian exchange recently on
the expectation that it would improve
further and might go close to parity.
winch is 5.18B lire to the dollar. are
SAID TO face large loss as the result
OF the withdrawal of support from the
market. A Baltimore olive oil importer =
VINO made more than a million dollars
IN gold shipments to Spain and other
similar transactions is said to have
invested a portion of his profits in lire
hoping to make a big killing when lire
advanced as he expected they would.
with lire quoted around 7 and 7.5O to
.he dollar this interest stands to lose
heavily, bankers said yesterday.
The action of the authorities with
regard to Italian exchange strengthened
the belief held in banking quarters
that the move to relieve the exchange
markets from all wartime restraints is
part OF general programme adopted
at the peace conference to hasten a
restoration of normal conditions in in
ternational trade.
Sterling exchange rates moved in a
somewhat more normal manner yester-
day and cable transfers closed at S4.71.
compared with S4.71ia the day before,
Demand bills closed "a of cent lower
at $4.70 after business had been trans
acted on basis of S4.6691a. French
exchange was somewhat tirmer.