Officially, it is a “Konversionskasse fur Deutsche Auslandsschulden, 6 Feb 1935. Series 1B.
Germany experienced its greatest depression during the 1929 world economic crisis. In 1933 the transfer of German foreign debts by Reich law was made under the supervision of the Reichsbank. All interest and principal on foreign investments in Germany had to be settled via the "Conversion Fund for German Foreign Debt".
This process ended in 1934 because the Reichsbank could no longer carry out approved currency allocations. Its gold and foreign currency holdings had fallen from 2.98 billion Reichsmarks (RM) in 1930 to 223 million RM. Therefore, the Reichsbank announced a complete transfer moratorium for the servicing of medium and long-term bonds of the Reichsbank-- no more currency amounts were made available. But 3 to 4 % bonds were issued from 1935 to 1944, mostly denominated in foreign currency with only a small part of it was on Reichsmark. Regulations issued in July 1935 called for a “conversion fund” to purchase the foreign bonds with payments due in RM from Deutsche Golddiskontbank. From 1935 to 1939 this bank acquired the German foreign bonds, which had fallen sharply in value due to the limited interest and capital repayments.
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