STILL GREATER SCANDAL

Sun (Auckland), Volume II, Issue 453, 7 September 1928, Page 9

STILL GREATER SCANDAL

GERMAN LOAN BONDS VAST FRAUDS SUSPECTED (United P.A.—By Telegraph — Copyright) (Australian and N.Z. Press Association) BERLIN, Wednesday. The recent arrest of Hugo Stinnes, son of the late magnate of that name, is believed to have been the prelude to a greater scandal. German war loan stock, which was bought before 1920 was worth 15 per cent, of its gold value. Stock bought later, during the inflation period, however, was only worth 5 per cent. Investigations carried out at the instance of the Ministry of Justice are alleged to have revealed the fact that banks in Germany, France, Rumania and Holland are implicated in the presentation of stock in the second category 'named as that in the first category to the extent of £1,000,000,000.

Hugo Stinnes was arrested on August 30 and imprisoned in connection with an investigation into war loan frauds. It was alleged that he had attempted to defraud the Government, and that he withheld information in connection with the investigation of charges against a former secretary of the Stinnes concern.

TJie shock of his arrest so severely affected Stinnes that the regular administration of stimulants and the constant attendance of doctors uvere necessary to keep him alive during his first night in the cells. 1I» was in a state of semicollapse next morning, when questioned regarding his share in the plot to defraud the Reich. The alleged plot is cornected with the law designed to restore to investors in the German war loan a fragment of their lost money. It was anticipated that there would be widespread attempts to defraud- It was estimated that the lieich would have lost £16,000,009, if all the attempts discovered last year had been successful. The Stinnes case was said to be only one of many. It was alleged that Herr Heinzmann, the Reich commissioner, who is investigating the war loan frauds, would have quashed the proceedings against Stinnes if he had been paid £5,000 through a Paris banker. Herr Heinzmann, when confronted by Stinnes, denied the allegation, but Herr Waldow confirmed Stinnes’s story, saying the banker had personally made the offer, which Stinnes rejected, regarding- it as blackmail.