German Railroads

The new status of the U. S. as the great creditor nation of the world is already bringing new and strange borrowers to Uncle Sam's loan counter in Wall Street. By an irony of fate, many of the European countries which lent us money a generation or two ago to build our railways, are now applying to Wall Street investment banking houses for loans to improve and extend their own railroad systems. One of the basic ideas in the Experts' Plan was to extract reparation payments from the German state-owned railways. As a preliminary step to this process, however, the German roads needed working capital to place them on a money-making basis. Altogether about $15,000,000 was needed. International conferences between London and Manhattan bankers ensued. Finally arragements were made to secure a third of this sum by floating a sterling loan in London under the leadership of J. Henry Schroder & Co. there. The remaining $10,000,000 will be obtained by a U. S. bond issue, to be floated by Manhattan bankers, including Speyer & Co., the Equitable Trust, Chase Securities Corp., Blair & Co. and the Bank of the Manhattan Co. The German roads are organized by the Experts' Plan under one company--the German State Railroad Co.--and comprise 33,000 miles of track, along with 31,000 locomotives, 70,000 passenger cars and 750,000 freight cars, most of which are less than ten years old.