Americans who've waited over 60 years for the interest on German bonds from before World War II now have a firm promise to get back $40 million of their money by 2010.
Advertisements in some U.S. newspapers this week advise Americans who hold four types of German Reich bonds, dating from 1924 to 1930, on how to exchange them for new issues from the Federal Republic of Germany."We've had quite a few claims already," Frank Gillick, an administrator of the program at Deutsche Bank Securities Corp. in New York, said Friday.
The new bonds mature Oct. 3, 2010, and pay 3 percent annual interest until then. Or they may be sold for 36 percent to 40 percent of face value, depending on the issue.
It's not the best little earner these days but better than zero, which is what the bonds looked like when Adolf Hitler stopped payment in the 1930s.
Gillick said in a telephone interview the biggest claim so far was for $40,000 in face value, and several of the claimants wanted to sell once their claims were validated.
Many original bond holders or their heirs already received repayments of principal. What's at issue now is interest that wasn't paid for varying periods between 1937 and 1952, and back interest to 1990.
Germany's Federal Debt Administration is still trying to identify those Americans who are believed to be eligible to claim $4.3 million out of a total of $31.7 million set aside for two of the bond issues. About $5 million is unclaimed from $7.6 million for the other two bonds.
The bonds involved include the German External Loan of 1924, called the Dawes Loan; the German International Loan of 1930, called the Young Loan; and the 1926 and 1927 External Sinking Fund Dollar Bonds of the State of Prussia.
Claimants need proof of original ownership or a chain of legitimate sales. Most bond holders registered with West Germany after Germany's old debts were regulated in the London Conference of 1953, when Germany was divided. Communist East Germany wasn't a party to the agreement, but democratic West Germany agreed to assume debts from after World War I.
The agreement helped establish West Germany's credit-worthiness, but repaying interest on some old bonds got low priority. It was put off until after Germany was reunited in 1990.
Since unification, Germany has set aside 260 million marks ($167 million) to cover certain old bonds.