THE DAILY BRITISH WHIG I British Were a Good Investment Because the British People Were the British People German Consols Are a Good Investment Because the German People Are the German People Rothschild bought British Consols at the beginning of the nineteenth centdry, when they were selling far below their intrinsic value. Why? Because he believed in the British people. a, Today, of Rothschilds, in every walk of life, throughout Canada and the United States, are buying German Consols while they are selling at a fraction of their gold value. : Why? Because they believe in the German people. Many of these far-sighted investors have already reaped handsome profits. It is more than half a century since the investing public has been offered the opportunity that the facts set below, taken collectively, constitute. It may be another fifty years before the opportunity will occur again, They not only merit your careful consideration and judgnient, but you owe it to yourself to decide and ant at once. . The Precedents England Prior to, and during the Napoleonic Wars, Bri tish Cornsols (as England's Consolidated Annul- ties are best known) sank steadily in value. Great Brita!n, at the end of these protracted wars, found herself in the position of a victor who had piled up a huge debt. For a while, confidence was shaken In her ultimate financial recovery. Following the example of the house of Rothschild, many investors, confident that England's recovery was only a matter of time, purchased British Consols at a fraction of their intrinsic value. Within a comparatively few years these astute in- vestors were able to sell at top prices and thousands made fortunes. The United States The period before and after the War of the Revolution in the United States witnessed a similar performance on the part of government securities. The French people had loaned large sums to the Americans. The United States were using a dopreciated paper currency, which had little gold value, in payment of these debts. Holders of American Government Bonds strongly protested this action. In 1785, M. Otto, Charge d'Affaires of France, wrote te John Hay, then Secretary for Foreign Affairs:-- " These loans represented the labor, the watchings and fortunes of a great number of individuals who had come to the assistance of the United States In most tempestupus times. Ancient commercial houses in France find themselves reduced to beggary from having placed too much confidence In paper money and loan office cert!- ficates. His Majesty cannot see with indifference the losses sustained by his subjectes' John Adams, United States Commissioner to France, supparted the contention that the use of dopreciated paper money to wipe out debts was inequitable. On July 11th, 1789, he wrote to Robert Morris that: -- " Every hesitation, every unéertainty about paying or receiving a just debt diminishes that sense of moral obligation of public justice which ought to be kept pure in every American mind. Creditors have an inalienable right to be and that by the fundamental prin« ciples of society. Can there ever be industry or decency without ft? ' To talk of a sponge to wipe out a debt or reducing or diminishing it below its real value, in a country would betray a total ignorance of the first prin ciples of national duty and Interest." The whole question had become of national impor- tance. Alexander Hamilton's conception of financial in- tegrity and the sanctity of public obligations of a mone- tary nature is well set forth in an extract from his report as Secretary of the Treasury, In 1789. Every breach of the public engagements, he wrote, whether from choice or necessity, is in different degrees hurtful to public credit. And a year later, General George Washington, Presi- dent of the United States, in his address to Congress, January 8th, 1790, said:-- "1 saw with peculiar pleasure at the close of the last session the resolution entered into by you expressive of your opinion thet #n adequate provision for the sup- DF not the Public credit is a matter of high importance the national homor and prosperity. In this sentiment concur." % Soon after, the American Government made an equitable disbursement to the holders of its bonds. Those who had purchased these securities when they had been selling at a fraction of their gold value when issued -- many had pronounced them worthless -- made fortunes. France French Government securities passed through th a similar experience at the time of the war wi Prussia. In 1870, declssmtion of war against Prussia caused a heavy fall i Judtselons for French Government securi- ties. In spite of the fact that France went through the heaviest strain of war financing known up to that tie, besides the revolution once more creating a republic, and two funding operations which reduced the Interest rates to 3%, the payment of a war indemnity to Germany, proof of the resilience of a great nation is found in the fact that these bonds steadily recovered in price until they roached their maximum price of 105.25 in 1897. of investors, in and out of it, who had her government securities when they were selling at 7% of their normal value were thus made com- y X Conclusion The experiences of England, the United . States and France, undoubtedly prove that the greatest fortunes were made by those who, in the . time of the most pronounced financial and political dark- ness, possessed enough grit and enterprise to enter the markets a8 purchasers of government securities when they went begging for buyers. The Opportunity Today Germany We are of the opinion that analogous opportun- ities for lucrative Investment exist today through the purchase of selected German Government Bonds. For several years now we have persistently advocated their purchase. In the face of stro criticism, through circulars. letters and newspapers, e have convinced thousands throughout Canada and the United States, that the opportunities for profit through mel of se- government securities havo been in the annals of world investment. * We give below figures showing the prices at which we sold German Government Securities appro; Soe year ago and their current quotations: -- A Year Ago Prices ~--Per Milllon Marks German Government 5s (1914-1918) City of Hamburg 4%s (1919) .... City of Berlin 4s (1919) cession - Clty of Berlin 48 (1920) Aceves City of Berlin 48 (1922) ........ City of Danzig 4s (pre-war) .. + City of Berlin 4s (1915) ..,...... 40.00 14,700.00 What are the causes for these sensational rises and what are the reasons that induce us to belleve that this movement Is but precursery to a riee of even greater pro- portions? These two questions we now Propose to an- wer: Germany and In the late war, Germany the War opposed practically the whole world. Bounded on all sldes with countries against am she was fighting, the nation literally | . Was it! borrow from the out- ald es used to finance her misasy, naval and civil undertakings came trom the German people themselves. Hence, her comparatively large internal debt. state and municipal government at one time the government acts uslly compelled citizens to subscribe to a loan. This issue 'was as the Enforced Loan of 1922 and fs an lssus which this investment house is at far below its intrinsic value. At the close of the®war and for several that « followed 'Table Showing Current Prices and Profit Opportunities ; German Government (Prussian) 3149, Consols Denomination 10,000 Marks.... 20,000 " 50,000 100,000 250,000 500,000 1,000,000 P »asent Pricéd -- 1 opin =r Bonds rising back to : approximate gold value at time of Issue will he worth $ 2,380.00 4,760.00 113900.00 . 23,800.00 59,500.00 119,000.00 238,000.00 Profits $ 2,335.00 4,670.00 11,675.00 23.350.00 58,375.00 116,750.00 235,500.00 $ 45.00 . 90.00 225.00 450.00 1,125.00 ' 2,250.00 Germany lost the War, but the inherent wealth of her mines and Industries, the skill and. inventive ability of her people till remained. of America's foremost political writers, in his Trave: Notes, wrote in part: "To talk of Germany as bankrupt is absolutely idiotic . this German people is very roud . . . no beggars here as in Russia and Poland. +This people is disciplined. . . It will dear hardships In stolc eilence as it. did after the Thirty-Years War." Further on he sayé: "The farming clisSes are very well off, and it must always be remembered that nearly one- third of Germany live by the land and off it." A nation of 70,000,000 people of the character and ability of the Germans, could not be stifled; their incen- tive courage and their business ability could not be killed. England and the United States Reason Plays 2 Pan at last realized that a bankrupt Germany meant trade depression the world over. They returned to the elementary economic conception that what was good for German prosperity would in the long run be good for British. American and Canadian prosperity; nations of the world prosper together, as well as suffer together. The outcome of this awakening was the setting up of the Dawes' Commission, which comprised Financial experts from every country of any importance, in the world. This commission eventually submitted the Plan that was halled as the -panacea for Europe's ills and this it has almost proved i'self to be. For five years Europe had been at a standstill. Many believed that she was slipping backward, but the final acceptance by the Allles and Germmny lifted like a cur- tain, the veil of uncertainty that had stified progress and rehabilitation. German Bonds Rise Almost overnight German Gov- - ernment Securities improved in price. Sensational rises were an hourly occurrence unth finally those securities which we had recommended reach- ed their present level; some weft higher and suffered a reactipn; the great majority showed a stupendous rise. We have answered the first question, let us now look to the second. * : Germany and the Dawes Plan The aim of . the Dawes' Plan is to obtain from Germany reparations for territorial damage, and financial loss, by those nations with whom she wae at war. The plan is. therefore a virtual first llen on all Germany property and industry. Germany is compelled for the moment to ignore her own internal obligations; before all else reparations PAY- ments must be met. Anyone who for a moment doubts her ability to discharge this obligation even sooner than she is expected to do so, betrays a great ignorance of the economic and financial conditiofis in the Germany of today. Total Indebtedness ™® has been estimated that the total indebtedness of Germany under the Dawes' Play represents at present value, about forty billion gold marks, or 10 billion dollars. Now, this amount represents what Germany owes to the outside world for the war. The present gold value of her total Internal obligations has not been estimated. The amount, of course, is large, for Germany raised every cent of wa: cost at home. All the figures used in these estimates, and elsewhere, when not obtained from our personal records, are taken frém sources which we believe to be reliable. Cost of War to Allies The war cost England, in round figures, 43 billion dollars. It cost France 38 billion dollars. And It cost the United States about 27 billion dollars, The ability of these last-mentioned countries to pay their war debts is indisputably conceded. To those who ery that Germany can never pay reparations and resume interest piyments and redemption proceedings on her internal securities, we make this answer: Germany has only one-quarter the war debt of Eng- land to pay. We believe she can both burdens at the same time. Moreover, we confidently axpect that Our Service IS reason for gratification to this investment house to investors throughout Canada, the United States and by investors in selected German Government and Municipal Bonds, In 1923, Frank Harris, one it will not be long now before pressure on the various political parties by every German citizen owniggy a government 'hond, will be irresistible. {so a= It must not be supposed that investors In German Government securities today must walt until reparations have been paid before they will have opportunities of liquidating their holdings at substantial profits. The per- formance of German bonds during 1924 is sufficient proof that such is not the case. Germany's Progress The press daily carries Incontre- vertible proof that Germany la making rapid etrides, financially and economically, to- wards regaining her former "Status. Her budget has been balanced. and not only balanced, but she Is showing a surplus each month. Favorable commercial treaties have been or are now being negotiated. Gold exports to Germany, made possible by the re- cent flotation of the loan under the Dawes Plan, have increased the holdings of the Relchesbank and furnished it with the lezally required reserves for the issue of addi- tional currencies, assuring the stabilization of the new Gold Mark, and precluding any possibility of renewed (nflation. Her payments in kind, made since the Dawes Plan went into effect, amount to 22,000,000 gold marks more than the total expected. The expectancy was about 83,000,000 gold marks monthly. Germany's Potential Prosperity Germany's potential wealth is common knowledge. We shall not, therefore, burden the prospective purchaser of her Government's bonds with figures enumerating her mines, factories, shipping tonnage and the like. Instead, we append the opinions of four famous Americans whose symposium on Germany today appeared in a recent issue of the Berliner Tageblatt: Mellon, Secretary of the Treasury, sald in " One. of the firet effects of the Dawes Plan has been the growth of a new mental attitude and outlook on the part of the'people of Germany and of all Burope. A new spirit of unity and a sincere desire for peaceful and amicable adjustment is apparent. The people are thinking In terms of co-operation rather than conflict: peace is indispensable as a condition precedent to econo- mical progress upon the German people themselves. The actual burden of reparations is not so great or so dis- heartening as the uncertainty under which they bave red labored. |, "Already, a certain sense of relief and something of the old-time industrial vigor and thrift are pervading your country, and there exists a wholesome air of con- fidence that your obligations can be met and the country red to its pre- 088." « restors pre-war greatn of 3 Butler, * University, in his contribution, $ " There is no animosity in this country, and I 4 whether there is any animosity in any other country Ro- wards the new constructive spirit which is manifesting itself In the German States and which will, we hope, establish itself for a long time to come in control of the internal policies and the foreign relations of the German people. . "We regard the so-called Dawes Plan as Intelligent, businesslike and practical. We look forward to its fair and just administration and to the steady rehabilitation of German Industry and commerce. inconceivable that the German world's scholarship, the world's literature, the the world's art and the world's Satie a leading among nations, as soon as the liberal spirit displaces and puts underfoot the remnants of militaristic autocracy." Willie H. Booth, President of the New York Chamber of Commerce, wrote in So "The ease with which the recent German loan was floated emphasizes the confidence which the investing public and the world has in Germany's credit. and the integrity of her intentions on the order created by the Dawes Plan. to Investors Do that it has been Instrumental in bringing handsome profits Newfoundland. Apart from the fortunes that were made Wwe were successful in proving a source of profit to those of our cllents-who bought British, French and Italian Government Bonds during the years that their respec- tive currencies touched record lows. . The following table, givi the currency units, illustrates rapnically high, low and current quotations on the threes most important European the. ovportunities that have occurred from November 1918 to date. $3.1 84.80% 03428 0589 14 . 185.738 08315 0413 Lira . . The remarkable improvements shown by the figures at the extreme right, as compared with those in the second column, greatly enhanced the value of those bonds been to a high state eof of his 'investm ents, for our Mail acoounts of those who transact thelr has been that clients 'served in this way are Our organization has HmMtation on the convenience and the most careful personal attention to the service business, and our experience bandied personally at our offices, Another sallent feature of malled free to anyone anywhere. economic developments in these interest to all in matters of foreign We invite usually sold 'or cash, may Brice fo accom our service to clients is the This publication while dealing counfries in which our clients and exceptionally large profits were made. efficiency. The place where. the investor lives sets no Service Department is uipbed to render usiness by mall es invite mall as well satisfied as those who are a Exchange Bulletin, published 'monthly - and for the most part with political, financial and are most Interested, carries much information 'of you to take full advantage of our organization. It is at your service for the asking. also be under in pany order. Blnce oF Sot pee Jour os Sowing ae a Sess nnnns (Prussian) 31% % money accepted cheque cash EE & Sk - x » a Beet an erate tens arate aakanen which you are to me by registered order for Bererasninniininaniniiiniiiii in full payment for J ~ v SEALE esNNIIINNI INAS trian tasers s or! > $ Sefsvannsannnedocnncdoninnnaianes eu ML LEE ER PPE PESO . War. "So far as the United States is concerned, there are extremely good prospects of placing Germany on a most favored-nation commercial treaty basis." Fred. T. Kent, President of the Bankers' Trust Cor- poration, New York Olty, said: "The feeling is great in America that Germany, under the Dawes Plan, is a very different Germany from that which prevailed subsequent to the Armistice." An English Banker's View Montagu C. Norman, Gov- ernor of the Bank of England, when negotiations for the loan to Germany under the Dawes Plan were in progress in October, 1924, sald: -- "In importance, as in amount, it completes, as it were, a series of international loans devised with the object of stabilizing conditions in Central Europe and of helping nations to begin now or later to meet their international obligations. I believe that the security provided for the bondholders not only has the approval of the Repara- tions Commission, but should have the approval of in- vestors in all countries. Over and above the question of security I see in this meeting a sign of the future. I believe that the uncertainty and lack of which may seem to have prevalled in Europe for "he last few years are at an end. I believe that the issue which is about to be made in New York, as well as in-the iehding capitals of Burope, will mark the turning point in the reconstruction of Europe. Hitherto, we nave look= ed back; henceforth, we shall look forward. The.occa- sion is unique. The loan ls safe, constructive, recon- structive and democratic. It is greatly to be rocommend- ed and should appeal to all." - These opinions but confirm the sound logie in the old belief that, as a rule, although wars and revolutions may retard clvilization, they have the immediate effect of stimulating human thought and endeavor. Thus in the case of wars there usually follows a period of expan- sion and invention in the defeated as well as in the victorious country. Our Own Forecast Even as long ago as 1931, we our- selves, In a forecast on Europe's we were offering Austrian internal Jo 0 going bankrupt; future, at a time when bonds, said t "The Nations bf Europes are hol they are not going to repudiate their debts. On the cone trary, if history teaches us anything, they are growing up to them. We expect to see an expansion of material wealth during the next few years which- will make ex- isting debts look ridiculous by comparison. The war Awakened Europe to many things; from now on, ma- chinery and production will play quite as olg a part in her development as it does if ours. This will result in an increase in her capita output, and correspondingly increase wages and purc asing power of the individual. Taxation will not be a huge burden, because incomes will be higher. Every aay Thich passes brings home more clearly and more £ bly the fact that Eurcpe,. in the main, is steadily coming back to normal, and™ that the unparalleled conditions caused by ihe great world war cannot long Prevail. When millions of men and populations of nations lend their collective efiorts to the task. nothing is Impossible. Austria will come back, so will Germany and all of Central Europe." After-Effects of War The opening of the Western States and the industrial devel- opment of the Southern States after the American Civil War; the stimulation of manufacture and agriculture in both France and Germany as a result of the Franco- Prussian War; the ind 1 and political awakening of Spain and the stimulation of agriculture in Cuba, Porto Rico and the Philippines following the Spanish-American War and the beginning of industrial gccupation in Russia resulting ¢rom the Russo-Japanese All these may be regarded as after-effects of War. has this period ol 4 transitory through which 8 now passing a oheeire ented opportunities to the investor. Political observers believe a more stable form of government has come into being in the na- tions of the world. This government has panied by more and- sound . economic conditions; both of 'these lead to a better equity behind the bonds of their governments. A o last war was absolutely without precedent in its alze, scope, methods and destruction. But if we take past wars as a precedent, then since the Great War was on a scale than before it, the =esults will be larger, the debts greater, but the expansion and stim- ulation of ehergies that are beginning to follow will also "" What To Purchase A meticulous study of the markets has convinced us that German Government (Prussian) 3% % Consols con- stitute the most attractive opportunity for profit, along the lines we have already described, on these same markets today. formerly formed part of the this 4 Prussian 3% % Consols consolidated debt of Prussia, having no fixed date of maturity, but reducible by purchase, have been added to, replaced by new issues, but their interest, prior to the developments mentioned before, had always been prompt- ly and fully paid. : In 1930, they were transferred to the central gove ernment of » and thus are now direet obliga~ tions of the Reich, backed by the entire resources of the German Republic. Gold Value When Issued The gold value of German Government (Prussian) 334% Bonds 1s based on the gold value of the old German Mark before the inflation period. The mark had a goid value of 23.8¢ in 1914 when the majority of the bonds under Prussia's Consolidated Debt were issued. A bond of 10,000 merks denomination had a goid value, therefure, of $32,380.00 in 1914. citizens who bought these bonds paid approximately that amount for Consols' when they were issued. The fact that the bonds have been the central government in no wa value. The German Government is under just us much obligation to honor these bonds as was the Prussian Government. ; Study the Table A glance at the table, showing prices and profits will sh these bonds can today be bought for $45.00 marks. When they are honored by th ment they should be worth Demand ing Our