Voices of Europe; Black market

The voices of Europe produced and recorded by Milton Mayer in cooperation with the University of Chicago under a grant from the Educational Television and Radio Center in cooperation with the National Association of educational broadcasters. And now Milton Mayer. Every European owes something that no American no the black market. We who live in an immense nation under one flag and a free economy and very few controls of any kind have no notion until we visit Europe of the complications of economic life in that shop continent. Of the thousand and one state controls and state monopolies that give Rice to the black market in coffee and tea and sugar and tobacco in Perth fumes and jewels and almost everything else the heart of the European black market is Harrah's and the biggest black market item in heresy is

money except for a few very small areas of Europe. Currency is import and export and exchange is rigidly controlled rigidly that is by statute but human nature defies the controls at every turn and buys and sells in spite of them. The man I am interviewing in Paris today I call him miss your DePaul the French counterpart of our Smith or Jones is one of the biggest black market operators in France. He deals only in currency. He speaks several languages. All of them almost flawlessly is home where I have met him by appointment is expensive away and artistically furnished the home of a cultivated man. But Mr DuPont is a man outside the law.

Miss you do Paul. What makes the black market black the fact that it's absolutely forbidden in this country to exchange foreign hard currency is at another rate that the official rate. The one which is tolerated by the government. Well now first of all what is the official rate. Well the official rate is the one which is fixed by the government at three hundred fifty francs to the dollar. Is there any other rate. Yes there are lots of other rates. You have first what they call the balance rates which is the rate. Watered in accordance with the foreign currency countries outside crocks like for instance Switzerland the United States Belgium or even Germany. Now this then this parallel rate is what in those countries you

have mentioned is the free market rate. Yes because it's a free market all over these countries which I just mention and what factors established that rate. Well the economical situation of France for instance. And during the tourist season the demand of French friends by people going to spend holidays in this country for instance at Easter or at summer time in Switzerland there is always a big demand of French friends than the Swiss people buy French francs and the French franc is going up. Then when the tourist season is over you can see that nearly every year the French franc goes down again.

Does the political situation of France affect this free market or black market rate. Yes it does because each time there is a crisis you can see our currency is like the dollar of the Swiss franc going up and the French franc going down. Then the free market rate which is legal in Switzerland and which if I understand you really represents how much hard currency a French franc will buy as the free market rate is to some extent an indication of the political and economic stability of France. Exactly. Does this situation of pain with the currencies are other major countries this fluctuation. Yes it does exactly the same. For instance the dollar goes up and the Swiss franc does the same thing. So does the Belgian franc mark and

also the pound. Which is not considered as a hard currency but which is still a harder currency than the French franc. Is there a great deal of speculation in these currencies. Yes when people begin to feel that there is something is going to happen in France they by either go for dollars Swiss friends. Is it legal to buy gold dollars or gold is legal you can sell and buy gold officially at any bank without any questions. How did the free or black market as it would be called here originate. Do you know much about its beginnings or does it go back to the beginning of history. No it started it started a little after the during the occupation. Before the war you couldn't they didn't the market was absolutely free. You could buy or sell dollars

pounds any currency which you needed. But since the war the black market started the so-called black and it was since the war that's the second world war of course right. Yes the French government fixed the price. Absolutely. Of the fray. Exactly. Now is for example let's say during the summer season of 1956 What was the free market rate roughly. Well in 1956 you mean this year it's been a little different because we had that Derian war which changed completely the picture for instance since 1950 if every year the dollar went down from June until October it was the same thing every year but this year it hasn't been the same because

of the difficulties in which we are involved now. And what would be the rate. Let's say the ordinary wintertime rate when there was no great demand for francs how how lower has the French franc gone. That was the highest price of the dollar was in 1949 in January. It went up to five hundred and fifteen just for two days. Then the French government asked the American government to help and in a few days the dollar then went down to four hundred and twenty. And since then it's been lower but now it's at four hundred today. Four hundred and three which is the highest price since 1949. And would you say then today at the time we're speaking

that this is really an indication of an unstable situation in France primarily due to the Algerian or North African War. Definitely. Tell me Mr. Dukat. Who engages in this what in France will be called the black market in Switzerland or these other countries simply the free market. Do officials participate or do they buy their currency. Yes even the bank the forecasters Even the Bank of France yes certainly. Now this using the words around this you have to explain please. Well you see the the market would be much higher if the bond of force didn't control in a way the so-called black market. Because when the people are afraid they buy dollars or they buy from people who have accounts in Switzerland.

Swiss franc dollars which are transferred from this country without the state knowing it. Then of course the quotation of the dollar goes up and the bond of homes has to settle. So the people are not afraid of seeing the quotation going up you see and seeing seeing their own currency going down. So every day they sell or they buy. They start to sell when they see that people are buying and then they buy at a lower rate the next day or the day after reaching the park. There is a limitation and I believe in the import and export of French francs into this country and from this country of thirty thousand francs a person. I think this is the official limitation.

It's not in my experience in going into France and leaving it. I've never been asked whether I had any currency or how much I had I've never been searched. So I should suppose that the flow of francs is really quite free. Well. They never ask you or the customs if you are going out of this country with Karen C.M. dollars or. But they very often ask you if you are taking Franks with you because they're the export nation of France is really a business and only tourists can buy francs abroad and bring them to this country. There is a tourist showing us now on French ban on French or non French residents. For instance if you were staying in France and if you had to be a resident in a temporary residence you couldn't bring friends into the country who would be following the same rules as the French where their last question

should depart in view of the fact that the flow of francs into the country illegally I suppose we should say is so tremendous that as foreigners can bring it all in one. How does the official rate actually make sense is it economically sound of the whole thing sounds artificial to me. Well it is artificial. But of course if it's the problem of free currency in certain countries if the currencies were free in France that would mean that a Frenchman would go to a bank and ours for dollars. If he goes to America lost two pounds before Belgian francs Swiss francs and our reserves are so small that we meet all the dollars we have for imports and we cannot

give the individual all the hard currencies which we need for other purposes. And in fact the French people have been accustomed to fear their own currency because different governments have always told us that they were not going to do any operations but our grandfathers and followers have learned that the word of the French government unfortunately is not all pays very. Dependable example that's right in the light of the fact Mr. Dupont that the rank is low and that its lowest state represents economic and political instability or France's fair to assume that the highest state of the American dollar is a true reflection.

I'm speaking now of the so-called free market as there is a true reflection of the economic and political stability of the United States. I don't think it has much to do with the United States I think it has. It's more a reflection of the instability of the French franc. In other words there are other currencies that are just as valuable. These are the the French franc notes that are certainly the Swiss franc French and for instance of the Dutch market the Belgian franc all the Dutch Giller. Thank you very much Monsieur different voices of Europe was produced and recorded in Europe by Milton Mayer in cooperation with the University of Chicago under a grant from the Educational Television and Radio Center. This program is distributed by the National Association of educational broadcasters. This program has been introduced by Marvin

Nair This is the end E.B. Radio Network.