AWe are written from Oldenburg: “The Staatliche Kreditanstalt Oldenburg has decided to issue a new type of time-limited bearer instrument in the form of “rye instructions”. The rye instructions, which in the main are based on a similar basis to the rye mortgage bonds already discussed, are to be issued immediately and are due on April 1, 1927. The issue price of a piece will initially correspond to the value of 125 kg of rye and the repayment will be based on the value of 150 kg of rye (as determined in the first quarter of 1927). The additional amount of 25 kg includes the interest for the four years from April 1, 1923 to 1927.
To cover interest until April 1, 1923, 5 percent (calculated on an annual basis) is deducted from the issue price. The rye instructions therefore do not receive any interest coupons, they are not subject to the obligation to deposit a deposit, and the capital gains tax is not deducted, but is demanded afterwards on the basis of the declarations of the beneficiaries. The rye instructions are bearer securities. It is intended to introduce them to one or another stock exchange and other facilities are planned that will enable regular trading in these instructions, so that the buyer can recover his capital and accrued interest before the due date according to the respective rye value.
The security of the rye orders is guaranteed by the entire assets of the state credit institution and by the unconditional liability of the Oldenburg State. The assets of the institution include, in particular, loan rights of equal value, which it must acquire from public corporations and landowners, in such a way that the issued rye instructions are always fully covered by rye loans of the same amount. The loans are only issued against proof that the debtor has unencumbered material assets (real estate, buildings, investments, etc.) of the same amount or will be created with the loan amount.
In principle, loans to cover current expenses or deficits in the budget of public bodies should not be granted. The private debtors (landowners) have to provide security by registering real encumbrances within the ward boundary. After all, it is to be expected that the rye instructions and similar papers will play an important role in capital investment in the near future.”
