Evening star., 1931-12-01
GERMANY MEETING
SERVICE ON DEBTS
Interest on About as Loans
Will Fall Due Within
Three Months.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, December Funds to
pay the December interest on 20 diff
ferent German dollar bonds, including
the government 51a per cent Young
loan, were in the hands of the distrib-
uting agents yesterday. Most Of the
money has been on deposit with them
for some weeks. This is especially true
of the sums of about 50, zoe, 900 required
to pay the December coupon on the
German national loan.
This fact is of importance in connec-
ton with1the effort now being made to
form 6 protective committee in behalf
of the holders Of the entire body OF
German dollar bonds held in the United
States.
Going over the list of these bonds
today It was found that, in the next
three months, or during the period
when some definite policy concerning
ultimate payments by Germany OF rep
arationS as well as commercial debts
will be determined, there are about 10
separate loans on which Semi-annpal
interest comes due. These loans repre-
sent combined outstanding amount OF
approximately $415,000,000. Many OF
them are the loans of German states,
such as Bavaria, Bremen, Hanover and
Saxony, as we'll as of such leading cities
IS Cologne, Leipzig, Munich, Heidelberg,
Mremburg and Dusseldorf.
Other Loans Included.
3hey also include the loans OF the
German Central Bank for Agriculture,
a note issue of $25,000,000 of the
0eutschebank, the leading financial in
stitution in Germany, and commit
ments in behalf of the country's largest
public utility and industrial corpora
tons, such as the German General
Electric, Electric Power Corporation,
United Steel Works, Siemens g. Halske,
Hugo SHINES and the Rhine Elbe Un-
ion. The greater proportion OF the in
terest payments in the next quarter are
those for which private German cor
porations are responsible and whose
earnings, as most recently reported, are
in the majority of cases ample to cover
the service of internal and external
debts.
In a. dispatch from Berlin to the As
sociated Press, DR.. Hans Luther, pres
ident of the ReichSbank, analyzes the
movements OF currency and exchange
through that institution since the END
of July, when the agreement with for
eign creditors took effect. His conclu-
sion Is that, in the period to November
is, Germany has repaid to foreign cred
itors over 81 900 000, 900. This has been
done at the expense of the Reichsbank,
whose reserve ratio or gold cover has
been declining rapidly, although in the
past two months Germanys balance OF
exports over imports has been rising
and has been one of the astonishing
DEVELOPMENTS in the German credit
situation. The German people, in
order to meet their current obligations
and pay down their loans as rapidly as
possible, have apparently done SO at
the expense of their domestic credit
position and now realize that they have
drained their resources faster than the
increase in their revenues warranted.
The banking attitude toward the
proposed Protective Committee for Ger
man bonds Is that, In as much as cur
rent interest payments are being met,
as in the case Of those falling due
Tuesday, and as there are as yet no
indications that default win occur on
coupons that must be paid on or be-
fore March /, there Is no practical ad-
vantage in pressing the claims of the
holders of American dollar bonds. Un-
doubtedly the determination If individ-
ual bond holders, as well as groups, to
start a movement for protection early
is due to some extent to their inability
to obtain information as to what is
going on abroad or an approximation
of the status of their loans under q
readjustment of reparations and COM
mercial debts to Germany. The situa-
ton in Germany and the attitude of
France toward reparations, and more
recently toward private debts, has been
so obscure for the past six months that
none Of those who have underwritten
the major portion of German dollar
loans have been willing to express an
opinion publicly, and only occasionally
In private, as to their final status or
probable market value.
Proof Of SoIvency.
The one sustaining proof of Ger
manys solvency Is that she has con-
tinued to meet all of her sinking fund
and interest payments promptly and
that meticulous care has been observed
by German provinces and municipalities
as well as by German private corpora
tions to preserve their credit standing.
There Is apparently no immediate pros
pect Of any deviation from this program.
(Copyright, 1s3l)