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O N A L 4

REGISTER
VOLUME 19

9 3 4

y

NUMBER 12

Washington, Tuesday, January 19, 1954

TITLE 17 COMMODITY AND
SECURITIES EXCHANGES
Chapter If Securities and Exchange Commission P art 240G eneral R u l e s a nd R egula
t io n s
A ct
U nder
of
the
S e c u r it ie s E x ch ang e
1934

TRADING IN GERMAN SECURITIES

On December 8, 1941, following the attack on Pearl Harbor, the national securities exchanges suspended dealings in securities of German, Italian, Japa nese and other Axis origin; and the Commission, having consulted with the State and Treasury Departments, re quested the Cooperation of brokers and dealers in refraining from effecting transactions in all securities of such ori gins. Trading was restored in Italian securities in December 1947 and in Jap anese securities in November 1950.
In March, 1951 following the an nouncement by the Government of the Federal Republic of Germany West Germany of its recognition of pre-war external debts of the German Reich, the Commission, having consulted with the State Department, advised that it did not intend to withdraw its request that brokers and dealers refrain from effecting transactions in German, se curities until full assurances could be given to investors, through validation proceedings, that only securities which constitute good delivery would be af forded a market in the United States.
This action was necessary because of the large volume of German securities, particularly foreign currency bonds, reacquired by the Germans and held in negotiable form in Berlin, which were lost or looted after the occupation of Berlin in 1945 by the Soviet armed forces. In September, 1952 and April, 1953, the Commission again requested brokers and dealers to refrain from ef fecting transactions in German securi ties pending the establishment of appropriate validation procedures.
The Federal Republic of Germany has enacted legislation requiring the valida tion of foreign currency bonds and cer tain internal securities, and procedures for validation have been or are being established. The Agreement on German External Debts signed in London on Feb
ruary 27, 1953, provided that the Federal Republic would permit the settlement of certain debts, including German foreign currency securities, and would provide the necessary foreign exchange to permit payments on debts which are settled.
Validation is a necessary step before a bondholder may participate in a settle ment which may be offered pursuant to the Agreement of February 27, 1953.
An exchange offer has been made by the Federal Republic with respect to certain issues of the German Reich and the Free State of Prussia, and an issue of the Conversion Office for German Foreign Debts. It is understood that further exchange offers are being nego tiated. Negotiations in the case of dol lar bonds issued or guaranteed by West German states or municipalities are be ing conducted by the Foreign Bond holders Protective Council, Inc., 90 Broad Street, New York 4, New York, and ne gotiations in the case of other German dollar bonds are being conducted by the United States Committee for German Corporate Dollar Bonds, 910, Seventeenth Street NW Washington 6, D. C. In quiries concerning these matters should be addressed to the Foreign Bondholders Protective Council or to the Committee for German Corporate Dollar Bonds, whichever is appropriate.
The procedures for validation are not identical for all securities. Under an Agreement dated February 27, 1953, en tered into between the United States Government and the Federal Republic of Germany, a joint German and Ameri can board has been established in this country to validate German, dollar bonds, and registration of such securities for validation began in September 1953.
In addition, under the provisions of a Treaty between the Federal Republic and the United States signed on April 1, 1953, no German dollar bond subject to the validation laws of the Federal Republic is enforceable unless and until it has been validated.
In addition to the problem of valida tion, the Commission has been concerned with obtaining for investors recent in formation about the various issuers of German dollar securities. Such infor mation is considered desirable in connec tion with the resumption of trading in such securities. In November 1952 the Continued o n n e x t p age
CONTENTS
Agricultural Marketing Service Pas Proposed rule making:
Beans, green and wax, frozen;
330
U. S. standards for grades___
Milk handling in certain Massa chusetts marketing areas.__
333
Rules and regulations:
Grapefruit, canned; U. S. stand ards for grades; miscellaneous amendments_______________
324
Orange and Grapefruit Export Payment Program UMX 135a Fiscal Year 1954; eligible countries______ ____________ 324
Agricultural Research Service Rules and regulations:
Pink bollworm; administrative instructions authorizing treat ment of gin waste for move ment from lightly infested areas_____________________
325
Agriculture Department See Agricultural Marketing Serv ice; Agricultural Research Serv ice.
Civil Aeronautics Administra tion Rules and regulations:
Standard instrument approach 317
procedure alterations______ _
Commerce Department See Civil Aeronautics Adminis tration.
Federal Power Commission Notices:
Hearings, etc.:
Alabama-Tennessee Natural Gas Co_________________
345
El Paso Natural Gas Co____
346
Missouri Public Service Co.
and Empire District Elec tric Co_________________
345.
Food and Drug Administration Rules and regulations:
Antibiotic and antibotic-containing drugs, tests and methods of assay for, and certification of batches of;
penicillin-streptomycin di hydrostreptomycin powder.
315
Health, Education, and Welfare Department See Food and Drug Administra tion.
313