Profitable Wraith

Like the ghost of a bad debt, the rumor that Soviet Russia might some day pay off the defaulted dollar bonds of the Tsars has haunted Wall Street for years. To speculators it is a highly profitable wraith.

For the past month it has floated about the Street again. As usual, prices of the bonds shot up in a flurry of trading on the New York Curb Exchange.

The 5 1/2% bonds (due in 1921) which sold for $55 per $1,000 less than three weeks ago went up to $197.50 in a week, stayed near there. The 6 1/2% bonds, due in 1919, climbed as high. Brokers laid the buying to idle talk that the Russians, angling for a big U.S. loan, would pay off the $75,000,000 in bonds to pave the way.

But the Securities & Exchange Commission, well aware that Russia has repeatedly refused to recognize the Tsarist debt, was more suspicious. Quietly, it set out to see who was: 1) buying & selling the bonds; 2) spreading the rumor.

Said SEC: the U.S. has "no official reason" to believe that the bonds will be paid off.

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