Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-05-12

School auditorium Tuesday night.
be paid for out of the funds provided
for that specific purpose"
S. Moreover. since the bank is like
" to have substantial amounts of for
eign exchange at its disposal or at its
call, the privileges of rediscount open
to central banks would give them the
opportunity to acquire foreign exchange
in one country against the pledging or
sale of foreign exchange in another,
without going directly into the foreign
exchange market.
"The advantage of this facility is not
to be lost sight of in connection with
the settlement of large international
obligations"
In the general relationships between
the bank and the central banks, which
would put into systematic form and do
much to crystalline and support the
practices which of recent years have
developed between them.
With these carefully drafted prefaces
the bank outline goes into the essential
machinery proposed.
Section i is entitled 1.-THE Essential
Functions" In its capacity as trustee
the bank will have the following duties:
One, to collect and disburse to the
man external loan of 1924 and possibly
to act as trustee for the loan.
Will Receive Obligations.
Two, to receive from Germany the
various obligations. including the rail-
way bonds provided for in the plan; TO
hold them in keeping and to issue to
the creditors its trustee receipts for
these obligations.
Three, to receive in approved foreign
exchange the service on class 2 or pro-
tected payments. Likewise, to place
in reichmarks in the Reichsbank the
service obligations to be nquidated
through deliveries in kind.
Four, to receive service on any OF pos
ible class obligations either in reichs-
marks as to interest or in reichsmarks
or foreign exchange as to sinking fund.
Five, distribution. The bank will
distribute to the creditor nations ac-
cording to program A the service on
class l obligations not already anti
cipated through process OF commercial
ization and sale. B service on class
obligations, which has been converted
into foreign exchange and C service on
funds for deliveries in kind.
Six. to disburse interest on COM
mercialized and marketed obligations to
fund.
Seven. to invest reichsmark balances
with the agreement of the Reichsbank
in approved forms of German securi-
ties holding the latter in trust.
Eight to act as trustee In other ap-
propriate circumstances.
Supervises Distributions.
In its general capacity as agent for
all the interested parties, the bank
will:
9. Initiate and supervise operations
for marketing bonds and arranging
conditions.
10. Supervise distribution Of pro-
ceeds to the creditors according to
their participation.
II. Supervise international CONVEX
sion loans.
IL. Deal with the situation prior to
and during moratoriums and initiate
such impartial inquiry as may be de-
sirable to enable advice to be given
thereon.
10. Deal with funds in Germany
during moratoriums.
IA. Deal with issues of securities and
against collateral securities in Ger
many.
Is. BY agreement with the Reichs-
ing moratcriums.
The bank outline then gives the es-
sential functions of the proposed in
stitution in relation to the different
classes of obligations. Four classes of
obligations are given. The arrange
ments common to the first two classes
are taken up first. Glass l includes
obligations relative to the uncondi-
tional annuity and class 2 those rela-
tive to the conditional annuity. Under
the arrangements common to classes
l and 2 the form Of indebtedness is
first treated.
Debt in Form of Annuities.
"Germany's debt shall be fixed in the
form of annuities. A certificate of in
debtedness representative of these an
nuities shall be delivered by Germany
to the bank as trustee of the creditor
powers. To this certificate of indebted
ness shall be attached coupons repre-
sentative of each annuity payable by
Germany. Each annuity coupon shall
representative of that portion OF the
annuity which is subject to transfer de-
lay and corresponding to the portion OF
Germany'S indebtedness which Is not yet
once mobiliZable, and the second part
representative of that portion of the
annuity which Is subject to transfer
delay and corresponding to the portion
of Germanys indebtedness which is not
mobilizable Each part of the annuity
coupon enjoys equal rights throughout
except in the one instance Of agreed
transfer delay"
After the form of indebtedness, the
bond issues are treated.
"On the request Of any one of the cred
| itOr governments the hank as trustee
If it considers such course opportune
| has the right to require the creation
of, and the German government Is obli-
| gated to create, isSuable bonds repre-
Senting the capitalization of any part
of the portion OF the annuity coupons
| not subject to transfer delay.
THE bank, however, is obligated
under the provisions set forth elsewhere
| to accede TO requests for creation OF
bonds made to 1t by states which are
DESTROYS of undertaking internal issues
of German bonds in connection with
conversion operations.
Guaranteed by Revenues.
1.-The certificate of indebtedness, the
| coupons attached thereto, and such
| bonds as shall be issued in capitalization
| of any parts of the annuities not sub
| ject to transfer delay, shall be made
out in the name of the German Reich
and shall represent an unconditional
obligation of the Reich, guaranteed by
its general revenues and those OF the
German states"
After the bond issues, collateral guar
antees are considered, and the choice
is left open between the four alterna'
tives treated in detail elsewhere in thu
outline.
THE general form Of the bonds fol.