Evening star., 1930-06-12
PREPARATIONS LOAN
ANNOUNCED TODAY
S98,250,000 of $780, ,000,-
600 German Bond Issue
- to Be Sold in u. S.
BY the Associated Press.

BY the Associated Press.
NEW YORK, June 12-Announce-
ment was made last night that the
American portion of the long awaited
$500, ,000,00 German loan, amounting
to S98250, 900, will be offered today by
a syndicate headed by j. P. Morgan
& Co.
The American portion of the loan,
known officially as the German gov
ernment international Sig per cent
loan of 1880, will be offered at 90
and accrued interest. The bonds run
for 35 years and are priced to yield
$50 per cent.
Other portions of the loan are being
offered either tomorrow or Friday in
France. Great Britain, Holland, Sweden,
Switzerland, Germany, Italy and Bel
GUM The loan is the direct and un-
conditional obi cation of the German
government and its appearance Is
heralded by bankers as a final step
in the settlement Of the German repa-
rations question growing out OF the
World War.
The issuance is an integral part OF
the Young plan and is the final step
in the adoption of the plan, transfer
ring the reparations question from the
political to the commercial field. Two
thirds of the total issue goes toward
the commercialization of annuity pay
ments in settlement of the reparations
debt of Germany to creditor powers,
and will be placed to their credit IN
the Bank of International Settlements.
The remaining Sl00O00,O0O raised by
the bond issues will be used by the
German government for the require
ments of the German Railway Co. and
the German post Office and tel2graphs.
To Buy With Sinking Fund.
A cumulative sinking fund, computed
to be sufficient to retire the entire issue
at or before maturity, is to be applied
to the purchase of the bonds at or be-
low 100 and accrued interest, or other
wise, to the redemption at the price OF
bonds drawn by lot. The bonds are
redeemable at 100 and accrued interest
upon not less than As days previous
notice, on June of any year, through
the sinking fund. and on June l, 1885,
and yearly thereafter. in amounts Of
not less than S7.500,000, principal
amount at the option of the Govern
ment. Coupon bonds are in denomina-
tions of $1,000, $500 and Sl00. The
principal and interest is payable in gold
at the Office of j. P. Morgan & Co.
without deduction for any German
taxes, present or future.
Bankers point out that the sole con-
nection of the Bank of International
Settlements. acting as trustee, is as the
agency through which payment will be
effected in accordance with the terms
of the Young plan, but that connection
in no way qualities or limits the direct
unconditional obligation of Germany to
bondholders.
No further issues for the mobilization
of the German annuity payments may
be made on any market without the
1f 1fn1V NOT TTr9n O0 N
the purpose of internal conversion Of
the national debt Of creditor nation
ANY offering in the United States, even
with the consent of the international
bank, bankers say, must have the ap-
proval of the Federal Reserve Bank OF
New York.
No More American Issues.
While no definite statement has been
made, leading American bankers do not
believe there will be any further Amer
ican issues and that offerings made with
the approval of the International Bank
will be marketed within the countries
10 whose governments the annuitieS flow.
Widespread interest has been shown
by financial interests in New York and
throughout the country in the German
been expected for some time. 1t was
explained today that the delay was
largely due to discussion of phraseol-
ogy in translating the terms of the loan
into French. German and English.
Bond houses report sales on a when
issued basis during the past 10 days,
with some prices a full point above the
offering price. The American issue is
the only one for North America, it was
learned. and whether any bonds are sold
to Canadian houses or individual in
vestors will depend upon the decision of
the offering syndicate. With this ex-
ception, the syndicates handling the
offering in each country are expected to
sell nationally only.