Dennis, hard to tell from the pictures for a really good estimate. I'd like to see the 'imperfection' better, its fairly large which would affect value a bit.
The swastika added to the holster is actually something done by GI's and not something that adds value, but takes away from the value. What is it marked on the rear of the holster?
I would say that your 1940 is worth $1000-$1400 (large valuation since its very nice except for the large imperfection), will make a difference if it is simply something that got on it and took the finish off or if it is damaged.
Is there a 2nd magazine or loading tool inside of the holster?
Otherwise the holster is worth $125-$225, depending on how it is marked and year, because it looks like a very nice brown holster on the outside. We'd also need to see that it has not been 'cut down' on the inside, as that kills the collector value.
Ed
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Edward Tinker
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Co-Author of Police Lugers - Co-Author of Simson Lugers
Author of Veteran Bring Backs Vol I, Vol II, Vol III and Vol IV
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