Evening star., 1940-04-16
Treasury Adopts
Official Valuation
OF Pound for Duties
British Governments
Rote Of 4.02 Used to
Protect u. S. Business
~ the Associated Press.

~ the ASSOCIATED Press.
The Treasury, acting to stave of
possible harm to American business,
adopted today the British govern
ments "of1cial" valuation of the
pound.
The Customs Bureau. ordered its
collectors to value British merchan-
disc at the fixed "of1icial" price of
$4.02h per pound sterling when as
sessing customs duties, instead Of
the free market rate, currently about
$3.50.
In effect, the action will make
some British merchandise more ex-
pensive in this country and prevent
the British from increasing sales
here through currency depreciation.
However, the Treasury gave no
official explanation of its action, and
some officials pointed out that the
difference in rates affected only
those commodities upon which tariff
duties are assessed on an "ad va
loren" basis.
The "Officiaw Rate.
The Official" rate is one fixed by
the British government, and is the
only price at which British currency
can be purchased in England. The
free rate is the market valuation of
British money outside of England,
where British money is sold by busi-
nessmen and international investors
who have received money from Eng
land.
England recently has restricted
the use Of "free" sterling by pro-
hibiting the purchase of several i'm.
portant British commodities, such
as whisky and jute. with free" ex-
change.
Ordinarily, the Treasury uses for
customs purposes the values of for
eign money certified to 1t by the
Federal Reserve System. Up until
March Is, the Federal Reserve GER
tilted the free" rate and 1t was used
for customs purposes. However, at
that time, the difference between
the official and free rates was only .
few cents.
On March IS. when the discrep-
ancy between the two rates became
great, the Federal Reserve system
startd certifying both the official
and unofficial rates. forcing the
Treasury to choose between them.
Other Like Action Taken.
Similar action also was taken on
the Canadian dollar, the Newfound-
land dollar and the Austria lian
pound. The Treasury announce
ment added that the Department
would carefully observe future de-
velopments with respect to those
foreign currencies for which more
than one rate Of exchange is re-
ported by the Federal Reserve Bank
with view to examining the situa-
ton with respect to any of such
currencies If changed conditions
warrant it."
Also today Secretary Morgenthau
exempted Iceland from President
Roosevelt's order freezing" Danish
and Norwegian funds in the United
States.
The Treasury head explained that,
although the King of Denmark also
was the King of Iceland. Iceland
now was acting as politically inde-
pendent state.
The Presidents order prohibited
the withdrawal Of any Danish or
Norwegian wealth from the United
States except on special permission
OF the Secretary of the Treasury.
The action apparently was intended
to prevent Germany or German
sponsored governments in Norway or
Denmark from seizing funds in the
United States until the United
States is satisfied with the legality
Of any proposed transfers.
Secretary Morgenthau said yes
terday that he also was considering
whether any of the Danish or Nor
wegian funds here could be seized to
compensate American investors in
case their investments in Norway
and Denmark should be repudiated.