German Debt Traded in London During the Second World War: A British Perspective on Hitler

Abstract

Two series of German bonds, issued in 1924 and 1930, traded on the London Stock Exchange throughout Hitler's 1933-45 regime in Germany. We isolate both structural breaks and turning points in these bond series. Major turning points follow Hider's reintroduction of conscription in 1935, the outbreak of war in 1939 and the D-Day invasion of June 1944. The German bonds' sustained downward trend after 1935 suggests that bondholders recognized the risks posed by Hitler's programme. Bond prices recovered during the war, however, and appear to have anticipated the overthrow of Hitler and the postwar settlement of foreign bondholders' claims.