is, it fades before the prospects for
similar profit that lie in some of the Russian Government Bonds
available in the United States. The Imperial Russian Internal Five and a
Half Per Cent Loan of 1916 amounting to 2,000,000,000 roubles will
illustrate.

Ordinarily the Russian rouble is worth 51.45 cents in American money. It
has gone down to 32 cents. At this rate of exchange a thousand rouble
bond bearing interest at 51/2 per cent would only cost $320.00. Based on
the normal value of the rouble this bond would be worth $514.60 or
$194.60 above the present price of the bond--an increase of about 60.8
per cent on the investment. Figuring roubles at the normal rate of
exchange the yearly yield would be $28.28 or 8.8 per cent on the
investment.

The fact that roubles are down so low is evidence that Russian credit at
the moment is not as high as it might be. The principal equity behind
this bond, as well as most other Russian securities available in
America, is the fact that Russia has immense post-war possibilities. She
will emerge from the conflict like a giant awakened and with the first
realisation of her enormous undeveloped resources. To offset this,
however, is the lack of stability of Russian Government as compared with
the other Allies which makes all Russian Bonds speculative.

On account of the difficulty in shipping bonds and the preponderance of
pro-Ally sentiment here, there has been a comparatively small market for
German and Austrian war issues in the United States. Yet, in the face of
these handicaps, a considerable market has developed. It is due to two
definite reasons. One is the desire of the native born and transplanted
Teuton to help his country. Many of them appear at the German banks with
their savings books eager and ready to make financial sacrifice for the
Fatherland. The other reason is that the German mark has so greatly
depreciated (it has gone down from 23.82 cents to 17.65 cents) that
should it ever come back to anything like normal and the Government
does not repudiate its issues the investment will be very profitable.

Here is the way it works out: in ordinary times a 4000 mark bond which
would be the equivalent of a $1000 American piece, costs about $960. At
the present low rate of exchange the same German bond costs $690.00 in
American money and therefore shows a profit on the exchange basis alone
of $270.00 or over 28 per cent. Austrian Bonds show even a larger
profit.

Summaris