GERMAN CREDITORS

Hokitika Guardian, 20 December 1933, Page 5

GERMAN CREDITORS

LOWER INTEREST

“WILL PAY WHAT SHE LIKES.”

(United Press Association—-By Electria Telegraph—Copyright.)

- LONDON, December 19. It is reported from Berlin that the committee of the Reichbank set up in connection with the Davie s and Young

(Plan loans to Germany, have in connection with the amounts maturing

prior to June 30 next, arranged fully for the transfer of interest unci

amoritieation of seven per cent, on

the Dawes Plan loan of and also interest on the Young Plan’ loan of 1930. Thirty per cent, will be transferred if all of the maturing interest-, dividends, and of the amounts paid into the (Reichbank Conversion Fund ■for foreign debts. Amortisation payment, except those in connection with the Dawes loan, will not be made. The regulations will apply to the German foreign owners of the securities. Under . the heading, “Cheating—or Hiding the Truth,’’ the “Daily Herald’s” city . editor says : Since the first moratorium was announced, . Germany’s (foreign creditors have been receiving SO per cent. There will be strong protests. The British Government will be asked,to take diplomatic action, but debt collection by. diplomacy is a hard job. The head'of the Reichbank, Dr Schacht, without producing a word of argument, virtually tells, the world that Germany will pay just what she likes, regardless of her. capacity to pay or of the legitimate claims of her bondholders, including those who have sold goods to Germany. Either Germany is reducing the payments because she intends deliberately to cheat the creditors or because her economic position is far worse than when Herr (Hitler .came to power.

(The ('“Daily Herald’s” , Berlin correspondent states; Unless Germany’s exports increase, the payments on foreign loan s are likely to be completely suspended.

The “News Chronicle” declares: The (Reichbank decision is a heavy blow Jto . German credit, since Dr iSchacht must know : that the only inferencecan (be that he does not care, hut is deliberately playing up to the Navi ideal of making Germany selfsufficient.

The/ "Daily Telegraph’s’’ city editor saya:.-- Dr Schacht’s decision -amounts to an unwarrantable. default. The ‘‘Daily -Mail” s a ys: Dr Schacht’s declaration-means that the British y-holder of - German State and municipal bonds are to receive less than one-third of the interest due to them, which completely rebuffs the British long-term -creditors’ representations that ia reduction .in interest from fifty to thirty per cent, was unjustifiable, It remains to be seen whether British.officinl action will follow.

GERMANY'S ECONOMIC POSITION

CURRENCY RESERVE INCREASE

BERLIN, December 19

According to Dr. Schacht, Germany’s

declining exports and the currency dumping prevent her from maintaining the transfer quota. He admitted that th Reichbank currency reserve, had increased by £6,350,000 since July 1, but five millions thereof’ is accountable by. the paymetng made under a new economic law allowing Germans to escape prosecution for evasion of the currency laws by bringing back their capital into Germany. This increase could not recur. Dr. Schacht added* that the actual receipts from foreign currency were only £12,500,000, which probably would be further reduced. Transfer, he said must cease jf additional imports became impossible. Germany’s gain of from 10 to 15 million sterling in her foreign debt service was offset four times’ by her international trade losses, which were due to the English, Swedish, American and Japanese currency dumping. Germany’s export surplus had declined ninety millions sterling compared to 1931.