The Washington times., 1924-03-06
GERMAN BONDS
ADVANCE in
PRICE
Reports Affecting Their Future
Status Causes Con-
siderable interest.
BY w. s. COUSINS.
Copyright 1924, by Cosmopolitan
News Service.)

0C0pyflghts 1924, by Cosmopolitan
News Service.)
NEW YORK. March 6.--Imperial
German government per cent war
bonds are stirring considerable In.
terest today In the world'sN principal
investment markets because Of the
apparently conflicting reports AZ
fecting their future status.
All forecasts Of the international
experts COMMITTEES on reparations re-
port cabled from Europe place par.
that Germany has wiped out her in
ternationtl debt. II SO, these bonds
are worthless. But the fact that
German investors are actively buy.
ing back bonds which they shipped
out in rcams to other, countries q
year or two ago, suggests that some.
thing may have occurred In tie
meantime to place q specific Valua-
ton on them. Since November.
1923, the market for these ve :uri
ties had advanced from $40 q mil
lion marks to $500 a mollion marks,
subsequently receding to about $500.
What ID the motion behind the call.
ing In Of these bonds by German In
.VeStorg? .>
Reasons for Advance.
"The- recent advance Ia German
war bonds" e. w. F1ender, manager
Of the foreign exchange department
OF the international banking house
Of c. B. Richard & Co., said today
"is due to an important decision Of
the supreme, court at Leipzig in No.
vember. 1928, and subsequent
Legislation based thereon. This, de-
ctsion established the principal that
a man who had incurred a debt in
marks, when marks had q specific
gold value, could not discharge that
obligation In deprecated marks, nor
could his creditor be compelled to
accept them in payment thereof.
While the decision related prin.
cipally to mortgage indebtedness It
was believed to apply equally and
as efficiently to all obligation to all
industrial concerns to restrain
from calling in bonds and paying
them off in deprecated marks. En-.
couraged by this decision, creditors
and security holders of German cor.
porations brought suit for their
claims in the lower courts.
I'm order to avoid clogging Of
courts with such suits, the German
government on February IA, 1923.
passed law providing for par.
tial restitution for security holders
OF industrial companies to an
amount equal to Is per cent Of the
gold value of the obligation at the
time 1t was contracted. AS far as
municipal and government securf.
ties are concerned. the law estab-
l1Shed that no interest and no re-
deIHption would be paid until all
PREPARATION payments have been ef-
fected. With the consent Of the
Reichsrat the government can make
the partial restoration plan Of.
fective for municipalities, but there
Is no guaranty that such action will
be taken.
200 Per Cent Interest.
This, Of course, leaves the Ger
man war bonds without definite
status on which to base any valua-
ton at least until the reparation
has been paid, for they are fifty
years hence; by that time accrued
interest will amount theoretically to
200 per cent. German investors
with any measure Of faith in their
fatherland, or with an eye to pro-
viding something for >posterity, have
taken the long chance Of buying for
500 an obligation of their govern
ment with face valuation Of $2aO,-
600 and more, in hope that II they
are not directly benefited their
children might be-
Mr.. Flender denied that investors
in other nations had met with great
losses in buying these bonds, though
their losses in German currency
and other forms Of Investment"
were enormous. 1--WE have been
returning to Germany nearly one.
half Of the war bonds brought over
here in 1922 and 1928, at much
higher prices than they were sold
here" he said. AT the beginning
Of 1928 German per cent bonds
sold at $50 q million in November
at SO million; in January, after
the Leipzig decision stimulated the
market, at $500. and today the
quotation is 5000 a million marks. -
The total volume of war bonds
outstanding is 100, 900 900 900 marks.
0a aAsaA~AA nns~e~