Evening star., 1934-07-17

commitments reported recently to
have entered into by the German
government with respect to British
holders of German bonds to insist
that measures be taken without de-
lay to assure equally favorable treat
ment to American holders Of such
securities.
Responsibility Inescapable.
The German government is aware,
as a result of the repeated repre-
sentations. written and oral, that have
been made to it, both through the
American embassy at Berlin and
through its own embassy at Wash
ington, that this Government con-
siders as an ineScapable responsibility
OF the German government tSe ex-
tension to American investors of
treatment that is no less favorable
than that which is or may be ac-
corded to the investors OF other coun-
tries.
The American Government does
not feel that this expectation can
be made contingent upon its enter
ing into special agreements as new
and additional inducements to the
observance of that obligation. 1t
should perhaps be pointed out that
the American Government has con-
sistently pursued a policy of refus-
ing to undertake direct negotiations
of settlements on behalf of holders
Of foreign securities.
Since the original contracts were
entered into with private citizens in
so far as the United States is con-
corned. this Government has felt that
subsequent negotiations for settlements
should be left to the direct representa-
tives OF the bondholders. This. how
ever, has in no sense implied indif-
ference to the treatment accorded
them The American Government has.
in fact, at all times insisted on and
defended their right to equality of
treatment as compared with the treat
ment given nationals of other coun-
tries.
Cannot Grant Concessions.
with respect to the specific situa-
ton now under consideration, the
American Government desires to stress
the fact that it cannot recognize the
claim on the part of foreign govern
ment TO withhold such equal treatment
or to render it contingent upon special
agreements involving trade conces-
sions, clearing arrangements or similar
measures
Furthermore, in the opinion OF the
American Government, there can be
no Justification for differentiation be-
tween creditors having exactly the
same unequivocal pledges from the
German government, and in whose
favor exactly the same revenues were
hypothecated with clear absence of
reservations. written or implied, at
the time the obligations were con-
tracted.
In the circumstances, the Ameri-
can Government must request an
early indication on the part of the
German government Of the remedial
measures which it proposes to take"
The Dawes loan is officially desig-
mated as the German external loan
of 1924. Bonds, bearing per cent
interest, were issued in different cur
rencies and tloated in the United
States Great Britain. Belgium.
France, Holland, Italy, Sweden.
Switzerland and Germany to WELD
approximately 800 900 900 gold marks
(about $l90, 100000 at that time).
Luther Is Quoted.
Paragraph 3 of the agreement en-
tered into between the German gov
ernment and the trustees for the
bondholders provided that all bonds
issued by the German government
shall rank equally. irrespective of
date or place of issue or otherwise"
An offlcial statement, prepared bv
DR.. Hans Luther minister Of finance
tnow Ambassador to the United
States), stated the loan was "a direct
and unconditional obligation of the
German government chargeable on all
the assets and revenues of the gov
ernment."
The Young loan is officially the
German government international 51a
per cent loan of 1880, amounting to
approximately $500 900, 900. of which
one-third was for the German rail-
ways, telegraph and post Office. and
two-thirdS for obligations 10 creditor
governments.
In addition to carrying the promise
for equal treatment the bonds were
described by Paul Moldenhauer, min
lister Of finance. as follows:
The payment of the principal. in
terest and sinking fund of the loan is
OF the German government to the
bondholder. for which the fun faith
and credit Of the German govern