Evening star., 1932-06-26
INTEREST HOLIDAY
INVOLVES BIG SUM
Austria'S Moratorium Action
Causes Some Concern Among
u. S. Investors.
Special Dispatch to The star.


NEW YORK. June 25.-Announce-
ment today Of temporary moratorium
on all of Austrias interest payments on
foreign loans affects about S100,000,00
of the outstanding dollar bonds of the
government and Ct various provincial
and municipal obligations, as well as
those of a number of Austrian indus
trial and public utility corporations.
Interest on the Austrian government
guaranteed loan. floated here in 1923 in
the amount Of S25. 100000 and since re-
duced to S18,5O0,000, was paid June l.
This is known as the international
lean" as it is guaranteed proportion
ately as to principal and interest by
Great Britain, France, Czechoslovakia,
Italy, Belgium and Sweden.
The second Austrian government
loan. also for S25 ,000000 was placed
here in July, 1880 1t is direct and
unconditional obligation CT the govern
ment secured by a charge upon the
gross receipts of customs and from the
tobacco monopoly, subject to the I'm
ternational loan" Interest en- this issue
comes due a week from today. 1t was
offered here at 95 and not well taken
by American investCrs. Subsequent to
its emission substantial blocks of the
bonds were repurchased by the Austrian
government bank.
Vienna Loan Is Largest.
The largest outstanding loan is that
of the City of Vienna, amounting to
S27 SOC. 900, with the original amount
$50, ,000.0 900, and sold in the United
States at 9012 in November. 1927. Other
loans are those of the Provinces of
Upper and Lower Austria, the Province
IF fI-,.ia nd IF cayaraJ t1NFdrO- al 4-;,
power companies in the Tyrol.
Resumption of interest payment on
the Austrian loans is contingent on
participation of the French government
in an accommodation to Austria, which
is likely to be made If certain conces-
sions are realized by France during the
reparations conference. This is one of
the vital features of the negotiations
now being carried on at Lausanne. where
the conferences this week have been
characterized by a more conciliatory
attitude. This has stimulated interest
in German external loans particularly
and resulted in higher prices for them
in both the New York and London
markets.
Bond Demand Br0adens.
A significant feature of dealings in
German bonds since the middle of last
week is that demand for them has
broadened and today represents buying
on a large scale for Scandinavian.
Swiss and English account. It has been
months since dealers in German bonds
here have experienced such activity in
this group. Its first phase was expressed
in the switching from German munich
pals and corporation dollar loans into
the government rs and 5l2s These |
issues advanced rapidly, carrying other
German loans with them to a moderate |
extent
Latterly the less secure loans have !
been showing decided strength, with an
increase in speculative demand Early !
in the month the advices reaching New |
York bankers from Germany expressed |
doubt over the ability of Germany to !
continue payments on any but the two /
government loans. There was also !
strong suspicion that default might oc-
cur on the government 512 per cent |
loan, though it might be continued on
the per cent issue, known as the |
Dawes loan. Consequently, great deal |
of selling by the one and the purchase
of the other took place.
Now sentiment has changed, so that |
there is less anxiety over the position !
Of the 512 per cent bonds and the better |
secured industrial and public utility is
sues Of German corporations.
Copyright, 1922