Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-04
EXCHANGE FARLEY
STUDIES CURRENCY
Maze of Regulations Ham,
pering European Trade May
Be Cleared at Prague.
~ Cable to The star.

~ Cable to The star.
PRAGUE. Czechoslovakia, November
4.--Haying registered comparative prog
ess to the extent Of a formula limiting
currency acquisitions TO the individual
territories of the participating coun-
tries. the delegates TO the Foreign Elk
change Conference here were prepared
today to tackle further tangles in the
maze Of governmental economic and
financial regulations that have brought
European trade to a disastrous stand
still.
Representatives of the Central Euro
pean and Balkan Central banks as we'll
as of the Bank for International Settle
ment at Basel under whose auspices
this conference convened yesterday, are
meeting under the craftsmanship of
President Vilem Poposil of the Czecho-
Slovak National Bank. Exchange tech
nicians are here from the central banks
of Bulgaria, Czechoslovakia, Germany
Greece, Jugoslovakia. Austria, Poland,
Rumania and Hungary.
America Is Affected.
This conference directly interests
Americans. for American exports and
eral dealings with foreign countries
are affected
Admittedly the comforting bankers
want an early return to unrestricted
transactions, but they do not see how
this can be done unless creditor coun-
tries advance foreign exchange. While
the amount required will have to be
estimated, each country will probably
state its needs to the Bank FOR Inter
national Settlements. which is ready
again to acS as an intermediary.
One of the subjects of these conversa-
lions is capital flight to creditor coun-
tries as contributing factor in for
eign exchange tightness in countries
operating under strain. Another sub
iect is the effect the fall of the pound
had on gold exchange standard coun-
tries whose currency was based on
pounds
Payment Means Scarce.
Europe's main difficulty with foreign
exchange transactions is that there Is
so little exchange. There are more than
enough commodities, but means of pay
ment are scarce, and where there are
the means of making payments abroad,
there are new difficulties in making
transfers.
These difficulties accumulate and
other countries are not able to make
foreign payments because weaker coun-
tries cannot make transfers. The re-
suit has been a tightening up on all
payments.
Even a sound country like Czecho-
slcvakia has bsen obliged to enact cur
rency and security restrictions. Some
weaker countries are holding their cur
rencies only by extreme effort.
rpcfripfinTC 1lCn1l lU take the
form Of Government control, with the
central banks and few agencies con-
Quoting all exchange deals. Residents
must turn in their exchange holdings.
Some countries are competing for ex-
changes held by firms having branches
in different countries. Individuals find
it expensive to travel, for rates are
artif1cially maintained. Many Ameri-
cans have been forced to leave their
currency with frontier officials includ-
ing even the dollars they had brought
in.
Must Protect Currencies.
The Bank for International Settle
ments called the conference because its
duty is to help protect the currencies
of ell of its members Conditions now
are just the opposite of ideal.
Behind the exchange stagnation is
incomplete world readjustment to the
new level CT commodity prices
Those newly enacted governmental
emergency measures, by which means
they are making foreign payments, are
doled out for necessities.
To tide over the readjustment period,
there are various suggestions:
l. Creation of clearing house under
the Bank for International Settlements.
2. Bonded warehouses for exchanges
on the old barter basis.
g. Creation of an exchange pool by
creditor countries.
4. Loans of foreign exchange to the
central banks of borrowing countries.
5. Tariff changes.
Copyright, 1887