Evening star., 1940-07-23
European War Debts
Para|yzing Blow 10
Foreign Exchange
Conquests Close VitoI
Centers and London
Curbs Trading
BY FREDERICK GARDNER,
Associated Press Financial Writer.

NEW YORK, July 23-Upheaval
in Europe has dealt paralyzing
blow to the ancient trade of money
changing, hardy survivor of CEN
turies of war, revolution and eco
nomic trials.
For the first time in the expert
ence of veteran money dealers in
Wall Street it has become virtually
impossible to carry on foreign ex-
change freely with Europe, erstwhile
tourist paradise and richest market
for foreign trade.
NaZi conquests of such European
money centers as Amsterdam and
Paris hit the complex international
money changing machinery in vital
spots. Trade with the continent
came to an abrupt standstill after
the fall of France, except for a thin
flow of business by way of Spain
and Portugal.
Now England has clamped down
rigid wartime controls on the pound
sterling, long the pivot of world
wide money dealings. What Wall
Street called the free" sterling
market-where buyers and sellers
had room to test their own ideas
of values-has been thinned down
to few scattered transactions un-
der recently imposed rules giving
the British control full powers over
the market.
What this means in everyday
terms Of changing a few pounds or
francs into American currency soon
becomes clear to war refugees and
repatriated Americans newly arrived
in the land of the almighty dollar.
Pays Stiff Premium.
Shopping among the money deal
ers of lower Manhattan, at the for
eign money window of the tourist
services, traveller with a purse of
strange currency usually can find
some kind of market. But often he
can acquire the dollar only by pay
ing stiff premium to compensate
the buyer for the risk of shipping
the currency back to Europe in war
time and getting it by the maze of
controls.
Hundreds of refugees in need of
ready cash have had to sacridece
their francs or sterling for what the
speculative market would offer. The
French currency, quoted around 2
cents in terms of the dollar before
the collapse of France, brought only
half cent for a time. Lately the
open market-some call it the
black bourse" in the absence of
official quotations - has climber
above a cent.
The British pound - officially
quoted at $4.021z to $4031a df you
can get it by passing scrutiny of the
wartime controD-dropped as low as
$3.50 for actual currency on this
side of the Atlantic on the surrender
OF France, dealers said.
The Street" market for British
currency has come back above SO.
BY diligent shopping among deal
ers it usually is possible to find some
kind Of market for Netherlands
guilders, Belgian belgas and other
currencies blotted out of the official
markets by the Nazi juggernaut.
But dealers say the amount of busi-
ness done in the lesser currencies
is so small they regard inquiries for
prices as a matter of academic in
terest unless the curious asker can
really show some coin or paper.
Then money changing gets back
to its ancient status of horse trad
ing and sharp haggling.
Allow for Risks.
In the downtown money shops,
where a museum display of exotic
currencies often advertise the buSi-
ness, the explanation usually given
for the spreads between official and
"black bourse" quotations is this:
I'VE have to allow for wartime
risks and for the costs of shipping
and insurance"
Cited among intangible risks OF
dealing In continental currencies Is
uncertainty just what kind of money
system may be set up there. There
Is talk in financial circles Of q
single continental currency in event
Germany succeeds in building a fed
Grated Europe for economic pur-
poses. revolving about the Rome
Berlin political axis.
Like the political future, the
money outlook is described by deal
ers as doubtful until peace returns
and the future economic system In
Europe takes definite shape.
For more than century, during
the growth of world trade, London
was the money center of the world
and the British pound the king.
pin of the money changing trade.
Now Berlin aspires to become the
money hub, at least for the cont.
nent. Nobody watches Hitler's moves
more closely than do the shrewd
men who practice the time -gilded
trade of money changing.