German bank imposes 4-day hold on old $100 bills But elsewhere, debut of new C-notes causes no problems in exchanges

April 09, 1996|By Dan Fesperman | Dan Fesperman,SUN FOREIGN STAFF

BERLIN -- When U.S. Treasury officials introduced the new $100 bill March 25, their greatest worry about its reception abroad was that holders of old bills might panic, thinking their money had suddenly become worthless.

Foreign banks also might react adversely, the thinking went, either by no longer accepting old bills or imposing unreasonable conditions for exchanges. Fears were greatest in such places as Russia and Poland, where $100 bills often are stashed beneath mattresses as hedges against shaky local currencies.

But nearly two weeks after the debut of the new C-note, one of the first signs of rejection of the old one has instead come from Germany, home of the strong and stable mark. The nation's largest bank, Deutsche Bank, now requires a four-day hold before it will redeem old $100 bills offered for exchange or deposit. For a tourist needing to trade dollars for quick cash, the new policy is tantamount to rejection.

One of the bank's most prominent branches took the policy even further, posting a handwritten sign that banned the old C-notes altogether.

The sign, in a branch on the Kurfuerstendamm, Berlin's most renowned shopping boulevard, came down Thursday when a U.S. Embassy official telephoned for an explanation after being alerted by a reporter.

Branch officials explained that they hadn't meant to single out the $100 bill, that they had merely been trying to discourage all foreign currency exchanges to shorten lines for local customers. Their sign had told a different story, however, specifically picturing the old C-note and stating that it was no longer accepted.

Tracy Hall, who handles Treasury matters for the U.S. Embassy in Bonn, seemed willing to let the matter pass as a misunderstanding, although his only official comment on the bank's new policy of a four-day hold was to say, "Our policy is that both the new and the old bills are legal tender. People can rest assured that there will never be any recall of our currency."

Deutsche Bank spokesman Manuel Seibel, speaking from corporate headquarters in Frankfurt, explained why the bank took the action, saying, "There are a tremendous amount of fakes" among old $100 bills.

Indeed, the reason the U.S. Treasury switched to the new bills was because they're harder to counterfeit. The new version features a larger picture of Benjamin Franklin and several high-tech printing techniques.

Mr. Seibel risked stretching his credibility, however, when he further contended, "If I would turn in an old $100 bill in the U.S., nobody would take it, no taxi and no bank."

In fact, Mr. Seibel could turn in an old bill right around the corner from his office. Commerzbank, one of Deutsche Bank's biggest competitors, is still exchanging marks for C-notes without the slightest delay.

"It is not a special case to exchange those bills," a Commerzbank spokesman said.

"They are valid and are being exchanged just like any other bill, nationwide."

Even in Moscow, where there had been enough worries to prompt a publicity campaign touting the reliability of the old bills, William Murden, a Treasury official with the U.S. Embassy, said: "So far the process has been remarkably smooth. There's been no run on the banks, no panic, no long lines."

And, he said, "We're getting very few complaints about exchange agencies refusing to accept old notes. Only one or two per week."

Perhaps only in Iraq have problems lived up to the worst expectations. Saddam Hussein's government literally capitalized on the switch by announcing in state-run media that the old bills will soon be worthless. That prompted panicky Iraqis to unload the bills at state-run banks, which are more than happy to have them instead of the weak Iraqi dinar.

Pub Date: 4/09/96

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