On account of the difficulty in shipping bonds and the preponderance of
pro-Ally sentiment here, there has been a comparatively small market for
German and Austrian war issues in the United States. Yet, in the face of
these handicaps, a considerable market has developed. It is due to two
definite reasons. One is the desire of the native born and transplanted
Teuton to help his country. Many of them appear at the German banks with
their savings books eager and ready to make financial sacrifice for the
Fatherland. The other reason is that the German mark has so greatly
depreciated (it has gone down from 23.82 cents to 17.65 cents) that
should it ever come back to anything like normal and the Government
does not repudiate its issues the investment will be very profitable.
Here is the way it works out: in ordinary times a 4000 mark bond which
would be the equivalent of a $1000 American piece, costs about $960. At
the present low rate of exchange the same German bond costs $690.00 in
American money and therefore shows a profit on the exchange basis alone
of $270.00 or over 28 per cent. Austrian Bonds show even a larger
profit.
Summarise our war lending and you get a total of all loans to
belligerent Governments since the outbreak of the war that aggregate
$1,828,600,000, which is nearly one-third of the whole cost of the Civil
War. Add to this our loans of $185,000,000 to Canadian Provinces and
Cities and $8,200,000 to the City of Dublin and to the City of London
for water works improvements, a grand total of $2,075,800,000 is rolled
up.
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