Evening star., 1934-01-25
Germany's American Debts.

In COnSplcuOuSly lrIIl ii1eihiei AS'A
dent Roosevelt has called upon Ger
many tor square deal in connection
with Americas heavy private invest
ments in that country. On MONDAY
last he summoned DR.. Hans Luther
the German Ambassador. to the White
House to remind him that Washing
ton has had no replies to two notes
previously dispatched to Berlin on the
subject.
The United States protests against
the action of DR.. Schacht, president
of the Reichsbank, in agreeing to pay
Dutch and Swiss holders Of private
German bonds the full current in
terest installments due them, while re-
curing other creditors to accept part
cash and the balance in scrip, redeemable
at the German gold discount bank az
only half its face value. President
Roosevelt demands definitely tnat
Germanys American creditors be given
the same treatment as creditors OF other
nations" Our interest consists OF ABOUT
$1O00,OO0 900 Of German national
municipal and industrial bonds and
s438,ooo 900 of short-term indebtedness.
Today at Berlin representatives OF
countries which have a stake in Ger
many's private debts are conferring
with DR.. Schacht The American
spokesmen, Messrs. John Foster Dulles
and Laird Bell, do not speak for the
Government, the debts due in this coun-
try being payable to private investors,
but the remonstrance addressed by the
President to Ambassador Luther clothes
the two Americans acting in Berlin
with what Europeans call "demi-semi-
official" status.
DR.. Schacht last year, with the ap-
proval of the Reich government, olthe-
ly proclaimed Germany's unilateral de-
cision to place the private debt service
On a new basis Thenceforward, he an
nounced, Germany would pay interest
In a form which cut the bondholder's
dues to seventy-five per cent. later ar
rangement reduced the amount to sixty
i've per cent. Meantime, Dutch and Swiss
bondholders had forced from the
Reichsbank, because Dutch-German and
German trade balances were IA
vorable to Germany, an agreement LOT
interest payments OF one hundred per
cent. 1t is against this discrimination
that the United States is protesting.
The British government also objects.
though as country that buys more
from Germany than she sells Britain
Is is q position to drive bargain akin
to the advantages secured by the Dutch
and the Swiss. AS the German-Amer-
lean trade balance is In our favor, we
pan only base demands for most-fa-
vored-nation debt treatment on the
discriminatory issue.
Messrs. Dulles and Bell will lay bare
at Berlin some striking facts in con-
nection with the Reichsbank's foreign
debt policy. It has been claimed that
while obtaining and retaining the for
eien credits which would otherwise go
abroad to pay interest on German
bonds, Germans at an outlay OF only
esO,000,OO0 have repurchased in New
York some of their own bonds repre-
senting face values of around $250,000,-
600. As DR.. Schacht has professed in
ability to get foreign exchange to meet
interest payments, he has been remind
ed that the $eO,oOO,OOO spent on repur-
chasing German securities would have
met all outstanding current interest in
debtedness. BY such maneuvers the
Reichsbank lops off a substantial slice
of Germany's overhanging debt. With
this purpose Washington has no quar-
rel except when 1t is accomplished at
the expense of American investors.