In Greece, a landlady who was owed six months' rent did not bother to collect it—it would have bought only half an egg. The Belgium Government sent great wagons, with armed guards, into the countryside to seize food from peasants for sale in the cities. In Paris, Communists scrawled a hammer & sickle on the walls of buildings below slogans pleading for lower bread prices. In all the freed nations of Europe last week the story was the same. Currencies fluctuated wildly, sometimes reaching fantastic figures. U.S. traders, who had hopefully looked forward to trade with Europe, snapped shut their books for months. Even if all the European governmental trade controls were lifted tomorrow, the giddy currencies would prove an insurmountable barrier until they are stabilized.
In Greece currency inflation was the most fantastic. The Nazis had flooded Greece with paper money, had stripped the country of all movable machines, foodstuffs and farm animals. By the time Allied troops entered Greece they found that the drachma, in 1940 worth about ⅔¢in U.S. money, was worth so little that the money blew about the streets of Athens.
No one bothered to pick it up. A U.S. dollar was worth 100 million drachmas. The daily bread ration cost 600,000,000 drachmas, and few could afford it.
By last week Greek inflation appeared to have passed its peak. One big reason: Finance Minister Alexander Svolos promised that a new drachma will be issued (probably backed to some extent by Greece's slender gold reserve and credits abroad), exchangeable at an unannounced ratio for the old. The value of the drachma rose slightly—at week's end, a dollar was worth a mere 90 million drachmas.
In Belgium under the Nazis currency in circulation tripled to 180 billion francs (prewar rate 36 francs to the dollar, present rate 44 francs). Prices of scarce food & clothing soared till simple dresses sold for $120, shoes for $70. Three weeks ago, Camille Gutt, Minister of Finance in the new Pierlot Government, took harsh measures to take the bulk of this currency out of circulation. Gutt called in bank notes of 100 francs and larger, returned no more than 2,000 francs to anybody, froze the rest in blocked accounts.
By such means, the Pierlot Government hoped not only to curb inflation but to tie up the money of war profiteers where it could be got at, at leisure. Last week Minister Gutt proudly announced that the harsh treatment had cured the disease. Some 90 billion francs had been turned in; currency in circulation was only 50% above prewar figures.
But Finance Minister Gutt was not yet out of the woods. The process of deflation shut off the flow of the limited amount of goods still available. Farmers, used to black-market profits, refused to sell at legal prices, so the Government sent trucks into the country for food. Workers who had managed to live somehow by patronizing the black market found themselves on the verge of starvation. Some thought the cure was worse than the disease.
The Allies promised 4,000 tons of food in the next three weeks. But Minister Gutt was in a nip & tuck race. His Government's ability to get food to the people determined how long it would stand..