Attempts to issue debt securities on a basis of stable value, which are based on a reliably marketable product, mostly a primary product, for interest and redemption in the same way as for raising capital, are increasing in remarkable numbers.
The movement, which meets the very widespread and justified need on the investment market, as well as in the entire business world, for assets that are as free as possible from exchange rate-related influences, has assumed particular dimensions since the last low movement of the Reichsmark and since then the considerations for creating Reich debt securities of stable value have initially come to a standstill came.
The first signs on the way to fixed loans were the rye bonds in Oldenburg and Mecklenburg-Schwerin, which were followed by technically similar issues in Hanover and elsewhere, most recently in the Minden district in Westphalia.
Then the application of the fixed value principle spread, in a particularly interesting form, but also in certain internal and in some respects notable modifications, such as in the case of the six percent coke value loan from the Franconian-Thuringia long-distance gas works and in the coal value loan of the Badenwerks, for which the state of Baden assumes the guarantee.
There are also reports of individual city governments considering the inclusion of bonds based on coal or rye values.
The breakdown of our monetary system
And it is particularly interesting that, as briefly reported, Hamburg-Amerika-Line has also recently been negotiating the issue of a gold bond of stable value, which apparently represents the international marketable shipping space with its income from passenger transport and freight and freight with its insurance coverage would serve as a basis.
These latter negotiations are said to have been initiated by transport insurance circles, which, after having switched to risk gold cover to a large extent, are striving strongly for investments of stable value to better cover the insurance risk.
In and of themselves, these currency experiments, both state and private, blatantly reflect the disruption of our monetary system.
Their multiplicity not only creates a certain amount of confusion in our bond system, but there is also reason to fear that this diversity of qualitatively non-uniform "value-stable" securities will impair the functions of the paper mark anyway, even if this formula remains the basis of calculation for the new bond types. will not affect it in a beneficial way.
In principle, it should be emphasized that there are major differences in the character of the previously known stable bonds.
Undoubtedly the method is economically the most sound that stood at the beginning of the movement.
The rye value bond, similar to the process in Mecklenburg-Schwerin, was based on the income from a certain number of leased state domains related to the monetary value of a certain hundredweight of rye, with the claims of the bondholders also in the event of changes in the rye price being given own original collateral basis is fully covered at all times.
the fact that the state liable for the loan has its own rye production excludes any value or currency speculation.
The basis of an investment of stable value would be very similarly consolidated, to which the issuer provides value-bearing and value-insured own tonnage.
Things are a bit different, however, if the issuer does not have the product on which the value of his bond is based.
In these cases - and this is especially true for any such municipal bond cases - taking out such a bond would be nothing more than a speculation on the stability of the market at its current level or à la bull market.
The fundamental difference to the well-known, heavily loss-making, foreign exchange promissory note transactions of German cities and industrial companies from the years 1917 and 1918 would be small.
There is another case at Badenwerk.
Here charcoal, namely in the amount of the monetary value of 500 to 10,000 kilograms of the Westphalian Fettflamm-Nusskohle IV, is made the basis of the loan conditions, although the Badenwerk does not have its own charcoal.
However, it has the electric current generated with the coal, the pricing of which will have to follow the respective customer value and in this way should secure the service of the bond in such a way that it is stable in value - apart from the guarantee that the state of Baden for this coal value bond - the total spending requirement seems to be calculated at 30 billion marks - takes over.
The risk with this form of investment is obviously that,
In this case, which is at least possible, the state guarantee could become effective and thus a corresponding use of the state's tax power.
This will have to be taken into account, since this loan, as a trustee, is obviously intended to a great extent for the country's savers.
It is simply not possible to get rid of the fact that the shortcoming of owning the own production of the product, on the value of which the loan is calculated, harbors a certain element of uncertainty.