The Ghosts Arise

When the U.S. entered the war, investors holding Axis dollar bonds became sadly aware that what they were really holding was the bag. In it were the bonds of five enemy nations with a value of $292,900,000. Actually, said the Commissioner of Internal Revenue, these bonds were worthless, could be written off as such in tax reports; and the SEC banned trading in them.

Last week these U.S. investors took

hope. On the London Exchange, where

trading in Axis securities is not banned,

Axis issues were on the climb. Typical examples: Jap bonds (Sterling Loan 53, 1907), which on the eve of war were quoted at 22, had risen to 29. Italian certificates (Maremmana Railway 55, 1862), quoted at 55, stood at 23^ when the U.S. got into the war; German (73, 1924, Young), selling at 17, had more than doubled. On the newly opened Frankfurt Exchange, stocks & bonds of much-bombed industries were 10 to 15% above wartime levels. Even in companies which had been completely destroyed, security prices were often 40 to 50% of their wartime value. But this was due less to any soaring hope in the future than to soaring inflation and the overvalued mark.

As yet, none of this bullishness has done U.S. investors any good. There is no way they can trade Axis dollar bonds in London or Frankfurt. Last week Wall Street buzzed with a rumor: the SEC may soon lift the ban on trading in Axis securities.

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