TRADING IN MONEY

Bay of Plenty Beacon, Volume 10, Issue 68, 3 January 1947, Page 5

TRADING IN MONEY

EXTENSIVE BLACK MARKET OPERATIONS TRAVELLERS ENJOY FREE HOLIDAYS A black market in gold, diamonds, securities and currency notes on a world scale is said to be one of the most- lucrative activities in which, people of all classes are taking part, says the special correspondent of the New Zealand Press Association. • These currency black markets are said to have begun since the end of the war and they have proved mostdifficult to check. They present opportunities for making quick, easy profits, chiefly because of the worldwide system of exchange restrictions.

Gold, for instance, compared with the official price in London of £8 6s an ounce, is worth £44 in Paris, £2O in India, £ls 6s in Egypt, £l6 6s in Hongkong, £ll 8s in Turkey and in Mexico £9 14s for bars and £ll 6s for coins.

Big profits it is also stated are being made in currency notes.

British travellers to the Continent' are allowed to take £75. Some have found that by taking this allowance in English in Swiss francs, they have been able to go to Switzerland, where there is at present no exchange control, and change these francs back into sterling notes at rates showing a considerable profit. The sterling can then be converted into French francs or Italian lire at attractive terms. The net result is that the traveller has considerably more francs or lire than he could have obtained with his £75 in London. Some have, in fact, returned with their £75 intact, having spent their time on the Continent on the proceeds of their black market dealings. As an indication of the black market values in Paris, although officially the value of the gold louis is 946 francs, it is worth in paper money 4900 francs. Officially, the £ sterling is worth 480 francs. The black market value is 1005 francs. The dollar officially is worth 119 francs, its black market value is 345 francs.

Diamonds are being smuggled by travellers to' pay their way in foreign countries, while gold is- also used for this purpose. It is reported in the Financial Times that many states all but connive at all illegal black markets in currency. Both in France and Italy, newspapers quote the black market exchange rates. Together with countries such as China, they are hoarding “hard” currencies or illegally exporting them to buy gold.