Evening star., 1932-11-13
German Foreign Indebtec SIS
BY FREDERIC J. HASKIN.

the total at $500, ,00o. 900. only $780,
00O, 600 of which is government or pub
lie debt The sum seems large, but IT
must be realized that it represents all
the vast volume of private business
which the people Of great trading
nation transact.
When Krupps. the great German
steel and munition organization, issues
bonds and sells them in the public
market they are bought far and wide.
When the Berlin gas works, the Dres-
den street Ger lines, q power plant here
and huge dyeworks there issue bonds
the people CT many nations buy them.
There is tremendous German popula-
ton in the United States and many
German-AmericanS own bonds of Ger
man companies as investments. Some
they owned bdfore they came over,
some they have inherited from rela-
tions still in Germany. All Of such
holdings go TO make up the externally
held German debt. Big industrial
corporations, steamship lines and the
like have borrowed from American and
other banks on short-term notes. This
adds to the external debt.
Germans Owe Americans.
In a study of the distribution Of the
debt it is shown that the American
people are the outstanding creditors
OF the German people. This applies
to both public and private indebted
ness. About $500, ,000, 600 in short-term
loans is owed here and $1,000 100000
in long-term obligations. The total
owed to Americans amounts to four
fifths of the entire external debt Of
Germany. 1t must be understood that
this is owed to American citizens in
their private capacity and not to the
United States Government, and that the
money is owed chiefly BY private In
dividuals and corporations in Germany,
not by the German government. Pri-
vate business always is on a greater
scale than public business. Public
business, governmental finance, is b.;
one department of private business and
finance.
In order. other creditors of Germany
are Holland, Switzerland, Great Britain,
France, Sweden, Belgium, CzechoSlo-
vakia, Italy, Denmark and Norway.
OF this total external debt. about So
500 900, 900 falls due next February
While the past year has been one of
depression in Germany, as elsewhere
in the world, and therefore some de-
faults in interest seem inevitable, it Is
believed that the great bulk Of what
then falls due will be paid on the dot
German debtors have the reputation in
world business and finance of being
good pay.
The interest charges on the German
external debt alone amount to about
S40O 1000 a year. This much must
be earned before the principal can be
attacked at all.
To the lay reader this statement may
create the impression that the Germans
owe a tremendous amount of money.
They do, but on the other side of the
ledger appear the debts of the citizens
of other countries to Germans. Amerf-
cans owe huge sums to German pro-
ducers from whom goods Of a wide
variety are purchased. Millions are
paid to German insurance companies
in premiums. 1t would doubtless be
found that even the United States
Treasury owes considerable sums to Ger
man citizens who have bought United
States bonds.
The modern trading world is one vast
counting house and while, in the morn
ing, one side Of the world may owe the
other, in the afternoon the pendulum
may swing back and the position be
reversed.