MONEY EXPORTED

Auckland Star, Volume LXIX, Issue 206, 1 September 1938, Page 7

MONEY EXPORTED

HEAVY FINES RISKED. "UNDERGROUND" METHODS. GERMAN INDUSTRIALISTS. (Special—By Air Mail.) LONDON, August 12. Fears of war, of a severe industrial slump, of unrest developing into open revolt, are among reasons given for a rush by big German industrialists to set their money out of the country, says Stewart Gillies, city editor of the 'Daily Express." Even officials of the Nazi party, ignoring risks that involve heavy line* and long terms of imprisonment, ar-. , making use of elaborate "underground" methods to put their possessions in safekeeping abroad.

Although the export of either mark notes or coins is prohibited by German law,' dealers in London. Amsterdam, Zurich and Paris, following the slum]) on the Berlin Stock Exchange, were pealing freely in both.

In London the market is daily handling anything from £4000 to £20.000 worth of N mark notes, calculated at the official rate, and a large amount of silver marks as well.

The principal agents for these Black Bourses are penniless aristocrats and landed gentry, who are prepared to take big risks for high reward. They travel by rail to the Dutch frontier, unscrew the enamelled metal signs with which German trains abound -and hide notes behind them before reaching the Customs.

Or they ostentatiously travel with a Jew, who attracts the attention of the authorities while they themselves escape more than a cursory examination. Some are even said to be travelling with diplomatic passports, which enable them to evade any examination whatsover. Others are smuggling not notes but goods, such as expensive telescopes, cameras and scientific instruments, which they sell abroad. The foreign exchange, however acquired, is being used for the purchase of gold, which is thereupon hoarded in safe deposits in London banks. This Black Bourse trade is bringing huge profits to London and other exchange dealers with Berlin connections. They, give £1 for every 35 marks they receive. Some are then able to smuggle the notes back into Germany, where their agents can buy £1 worth of good.s for every twelve. The German authorities fully realise that, despite rigid precautions and heavy penalites, notes are fleeing the country in large quantities. The resultant drop in the note circulation is causing a shortage of currency. In order to check serious deflation, the Reichsbank are actually buying back illegally exported notes at rates which, though well above the official level of twelve, still leave foreign dealers with a handsome profit margin.