Five days after Pearl Harbor, the SEC banned all trading in Japanese bonds and the Commissioner of Internal Revenue ruled such issues to be worthless. Many U.S. investors who held 14 issues of Japanese dollar bonds with a face value of $76 million lost hope of ever being repaid; some wrote them off as losses in tax returns. But in November 1950, SEC permitted trading to resume. Speculators drove up the prices. One issue (1930 dollar 5½%) rose from 60 on the opening day to 95½ last July (v. 70 in 1941).

Last week, after two months of negotiations with...

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