Show Three Billions ii in ill Bonds Listed Lis as in Dc Default fault faultA A survey made by the Institute of ot International international Finance shows that foreign foreign for for- eign dollar doUar bonds bonds- with a face value of about are now in default either In iii principal or inter est This is an unpleasantly high percentage percentage per per- of a total of of such bonds L issued and outstanding But the fact that payment is In arrears arrears ar are ar- ar rears docs does not mean of course that eighths of this large investment must be written off as dead loss The present survey makes it clear in fact that hat unusual methods are being used in n many cases to maintain payments It also helps to explain why defaults have lave occurred and by Implication to suggest how much of our foreign investment investment in in- vestment may be salvaged I Some form of interest payment Is Isling being ing made on about bout half of the thel defaulted issues sues This is being done chiefly in the form of scrip in the case of bonds v valued at and in the form of funds deposited in local currencies In the case ease of an additional There remains remains re reo re- re mains only on which no provision whatever has been made for or interest payments payments- This is less than han one filth of the total amount of foreign dollar doUar bonds outstanding The second point of oC major interest interests is s to be found in the geographical analysis made by the survey Of nearly neary near near- ly y in dollar donar bonds issued by py public and private agencies in far eastern countries less than 1 per percent percent percent cent is in iii default The record of Canada and other North American countries is also good considering the great difficulties of the last few rears yeats defaults here have occurred on only 5 per cent of the bonds is is- sued For Europe the fj figure fure ure is much higher amounting to 46 per cent But this is due primarily to the special special special cial position of ot Germany which In Inet et effect used the proceeds of foreign loans to pay reparations with Germany Ger many c excluded the proportion of European defaults falls from 46 per percent percent percent cent to 20 Finally there is 15 Latin America with the unfortunate record record record rec rec- ord of nearly 80 per cent of its dollar dol lar bonds In default as to payment of interest t. t But granted that reck reek and worse was exhibited In Inmany inman inmany man many cases this high percentage is clearly due primarily to the fact that Latin American countries are h heavily dependent for the purchase of foreign for for- eign exchange on the export of a limited number of raw materials- materials coffee copper hides rodes wheat etc The value of such products and nd the volume vol ume of trade in them declined drastically dras during durins the depression lon Recovery of world prices and particularly par parS the reduction of tariff barriers bar In the United States Slates would great ly enhance the prospect of a resumption resumption tion of interest payments In the thelong thelong thelong long run if it we wish to be paid we must accept payment in goods and services New New York Times |