1935 WWII Era Third Reich Finance
100 Gulden Ten Year 4% Bond
Konversionskasse für Deutsche
Auslandsschulden
Dutch Issue Series 1
What You
See Is What You Get
Lot KKH14406: Very fine example of a Conversion Bank for German
Foreign Debt bond for 100 Dutch Guldens (florins) from
the Third Reich; verso describing in German and Dutch the
terms of the bond, and endorsed by the Reich Chancellor Adolf
Hitler, Reich Minister of Finance Graf Schwerin von Krosigk,
and Reich Minister of Economics and President of the
Reichsbank, Hjalmar Schacht. Condition rates an old-school VF+
See scans.
Authentic historical artifacts documenting
turbulent times. The last few remaining examples of these
canceled certificates were auctioned off by the German Federal
Office for Central Services and Unresolved Property Issues
(BADV) in 2008. It was part of their sales of the 'Reichsbankschatz,' a
great hoard of pre WWII shares and bonds which were discovered
in the vaults of the former Reichsbank in Berlin shortly after
German reunification in 1991.
Lithograph by the State Printing Office in
Berlin on standard European A4 size paper. Punch and stamp
cancel. The face of the bond for sale is pictured above,
images of the backs and BADV stamp are provided as examples.
Appealing to scripophily collectors, historians,
and educators alike, they make for an interesting addition to
Second World War
and finance collections. Makes a nice gift for the Old Cold
Warrior, student, educator, or history buff in your life!
Shipped FLAT
via USPS Ground Advantage, with tracking. YES! Will
combine shipping - First lot ships at standard rate, all
other lots in same order ship free (except where noted).
Thanks for
looking!
Please see my other
items for more Third Reich, Soviet and
other historical curios.
Q: What am I buying, and why would I want
it?
A: Three years of the Great Depression had
nearly depleted Germany's foreign reserves. This foreign
exchange shortage in the waning days of the Weimar Republic
left the Reich struggling to service its large foreign debt,
and threatened to cripple its overseas trade. In June of
1933 the Konversionskasse für Deutsche Auslandsschulden
(Conversion Office for German Foreign Debts) was established
as a means to control the outflow of foreign exchange from
Germany.
Administered by the German central bank, the
Reichsbank, the Konversionskasse was responsible for settling
international transactions. Under the law, Germans owing
payments of rent, interest, dividends, or amortizations on
foreign debts contracted before 15 July 1931 (excepting
certain obligations, such as the Dawes and Young loans,) would
pay to the Konversionskasse the amount due in Reichsmarks,
thereby discharging their debt. The Konversionskasse would
then pay to the foreign creditor an equivalent sum, only
partly in cash, with the balance paid in non-convertible
Reichsmark denominated scrip or interest bearing foreign
denominated bonds.
All of these funds were "blocked," in that they
could only be used to buy German goods for export, or for
certain trade related expenses. But, while they could not be
used to purchase hard assets or for speculative purposes they
could sometimes be exchanged for hard currency (albeit at a
50% discount,) at the Reichsbank controlled Golddiskontbank,
when foreign exchange was made available.
As of March 1940 the Konversionskasse had the
following in outstanding bonded debt (in millions of
Reichsmarks):
- 4% G.B. Sterling – 101.9
- 4% Swiss Francs – 63.1
- 4% Dutch Guilders – 5.4
- 4% Swedish Kroner – 22.2
- 3% Reichsmark – 70.3
- 3% Swiss Francs – 3.9
- 3% Dutch Guilders – 11.3
- 3% French Francs – 0.5
- 3% U.S. Dollars – 125.7
- 3% Canadian Dollars – 0.2
- 3% G.B. Sterling – 0.9
In the United States, trading in the bonds was
made illegal after 21 December 1941. Following World War II,
the London Agreement on German External Debts, negotiated in
1952 and implemented in 1953, provided that ⅔ of the
outstanding interest then in arrears was to be waived with
the remaining ⅓ being recapitalized. The agreement also
provided that the maturity of the bonds be extended 17
years, and that Reichsmark denominated bonds and scrip be
converted to Deutschmark on a 10:1 (old to new,) ratio.
You will hold history in your hands.
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