Debt instrument named after the American financial politician Charles G. Dawes (1865-1951), which the German Reich issued in 1924 with a coupon of originally seven percent in the amount of 960 million gold marks or $230 million to meet its reparations obligations under the 1919 Treaty of Versailles following World War I (1914-1918). As collateral for the bond, Germany had to pledge the Imperial Railroad, customs duties and some excise taxes.
The Reich government under Chancellor Adolf Hitler (1889-1945), which came into office in 1933, decreed the termination of all German external debt servicing. – In 1953, the Federal Republic of Germany settled the claims of creditors in the London Agreement on German External Debt. Nevertheless, there were repeated claims, especially by American lawyers, against Germany in connection with the Dawes bond and even corresponding lawsuits before the courts. This also included a number of other old bonds, such as the one issued by the city of Dresden in 1925. The proceeds of the Dresden bond, amounting to the equivalent of 18.4 million Reichsmarks, were used by the city at the time for the expansion of the municipal electricity plant and the tramway; the bond was due to mature in 1945. In 2004, the Federal Court of Justice ruled in the last instance that the city of Dresden at the time was not legally equivalent to the city of Dresden today. This ruling caused a wave of outrage in the United States. – See Chamber of Securities Settlement, real security, sovereign debt, denied, securities, risk-free, prosperity index, Young bond.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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