Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-22
LOANS OF GERMANY
WELL PROTECTED
Young Plan Bonds Secured
by Railway Tax-Inter-
est Assured.
ipeciai Dispatch to The star.

Special Dispatch to The star
NEW YORK, October 22.-It IS not
surprising that there should be 50 much
confusion over the status Of the Ger
man dollar loans fioated in this coun-
try, in view Of the discussion now TAX.
ing place here and abroad covering the
possibility OF temporary cessation Of
reparations payments by Germany.
This grows out of the common mis-
understanding of the nature of the
dollar loans and their relation to the
so-called political loans of Germany.
Holders Of German bonds, and especial.
ly those who bought the SD per cent
Young loan last June. have been dis
turbed ever since the September IL
election in Germany by the political
fury that attached to it and the talk
that followed of revision or repudi-
alton of tie Young plan.
Political Debts.
With the government success in the
Reichstag on Saturday German issues
have been steadier. The cloud that has
gathered over them has not by any
means disappeared. for the reason that
they are still closely associated in the
public mind with political eventualf-
ties that may develop soon. but which,
20 a~matter of fact, would be to their
DEAACAb bAAdA W bAACA 0AorA0~
vantage.
The political debts Of Germany are
those associated with reparationS. The
commercial debts, these including the
government loans and those of quasi
governmental character, are the obliga-
tons of the German people, who regard
them as necessary to be maintained and
protected in order that the credit Of
the Reich may be preserved.
The Young 10an which has heer
chief target for those who have made
capital out of the political disturbances
in Germany was authorized under the
law of March Is, 1880 and by that of
May 80, 1880 enacted by the German
Reich. It represents the capitalization
Of a portion of the unconditional an
nuities" payable to Germany under the
new plan. In order to guarantee the
service of the annuities, the German
government created a fixed annual de
rect tax of $157,212,0 900 on the German
Railway Co. for period of 81 years.
This tax has priority over any tax that
may hereafter be leveled on the railway.
AS a further support of the loan the
German government undertook at the
time the loan was authorized and with.
out perjudice to the 7-per-cent Dawes
loan, to reserve free from any charge
for any other loan or credit, the pro-
ceeds of the customs, tobacco. beer and
alcohol duties.
Able to Pay Interest.
There has never been any question
Of the ability of Germany to pay the
interest on her foreign loans. Even IN
the present disturbed business situation
with revenues from taxes decreasing.
there is liberal margin for the service
of all external debts
AS to whether in the present situa-
ton, with trade in Germany deeply af-
fected by political conditions and the
worldwide slump in commodities, Ger
many can continue to meet the annual
portion of the reparations debts es-
tablished under the Young plan, is
subject more for political than for eco-
nomic discussion. There is undoubted-
ly a strong move for revision of these
debts. 1t is significant that most of
the propaganda that has developed sug-
costing such a revision. has originated
IN France. The whole subject is likely
TO be the livest topic of discussion in
international, political and financial
circles this Winter and eventually may
find its way into the debates Of the
American Congress.
(Copyright, 193O.I