During the Great Depression, Germany defaulted on its gold-backed bearer bonds. Jeffrey Weston examines the schemes used to prevent bondholders from collecting.
A financial consultant with over 26 years experience in the securities business, Jeffrey Weston played a key role on two important court cases that confirmed the value and validity of the German bearer bonds.
During the Roaring Twenties, Americans bought hundreds of million dollars’ worth of gold-backed bearer bonds that Wall Street marketed on Germany’s behalf so the European nation could meet its World War I reparation obligations. As Weston began investigating the bond issuances and subsequent default that occurred when Hitler came to power in 1933, he uncovered a scandalous area of global finance dubbed “The German Gold Bond fiasco”.
Aided by questions and feedback from host Melinda Pillsbury-Foster, Weston weaves a fascinating tapestry of historical events such as the 1945 Validation Law and London Debt Accord of 1953 that explain how these unpaid bond claims now represent an obligation amounting to hundreds of billions of dollars.
Jeffrey Weston’s book series
• The German Financial Time Bomb: A Betrayal of the American Public, A Fantastic Deception, 50 Years of Cover-Up and Now a Solution (CLICK HERE to order).
• Detonation! The German Bond Saga Reaches Critical Mass (PRE-ORDERS being taken).
• The title for the third book of the trilogy will be called “The Aftermath”.
London Debt Accord
Source: Sovereign Bond Exchange LLC
In 1953, international officials reached the London Debt Accord, which included a scheme under which holders of the bonds could exchange for new bonds that paid half the original coupon, or 3.5%. U.S. officials — mindful of the number of Americans who held the bonds — successfully lobbied to have written into the accord an option: debt holders could hang on to their old bonds and petition for payment, but they would have to wait 41 years to do it — enough time for Germany to pay off the reissued debt. That grace period ended in April 1994.
MORTIMER OFF SHORE SERVICES, LTD., Plaintiff-Appellant-Cross-Appellee, v. The FEDERAL REPUBLIC OF GERMANY, Defendant-Appellee-Cross-Appellant
Docket Nos. 08-1783-cv (L), 08-2358-cv (XAP).
Argued May 13, 2009. — July 26, 2010
Source: Find Law for Legal Professionals
1. Validation Law and 1953 Treaty
The Validation Law requires, inter alia, that the specified bonds held on January 1, 1945, outside West German borders as they existed in 1937, be registered, submitted along with relevant evidence, and validated after an administrative hearing by a Board for the Validation of German Bonds in the United States (“Validation Board”) in Germany or the country of offering.
Bleier 2nd Amendment Complaint (PDF)
RICHARD BLEIER; LFRIEDE KORBER; CHRISTOPHER MARK; Individually and on Behalf of All Others Similarly Situated
Case 1:08-cv-06254 Document 82 Filed 09/17/2009
The complaint relates to the extraordinary, negligent, careless, reckless and/or otherwise fraudulent, wrongful or unlawful lengths to which the GERMAN government and its agents, and the other, Redemption and Paying agents and Trustees, or banks, DEFENDANTS, will go to stop legitimate bondholders from ever collecting upon a 70 year old debt, or otherwise using German gold bearer bonds in any way they see fit, and for whatever commercial purposes they choose.