THE FRANCO-GERMAN INDEMNITY OF 1871 271 
have got the indemnity in the form of foreign investments; not 
necessarily the identical ones with which the French parted, but the 
same in amount. They did buy foreign securities to some extent ; 
but here again we have only hints and indications, no precise infor- 
mation. The debts of the former German States were paid off, and 
the former holders sought new investments. These were partly 
domestic; an extraordinary increase in new joint-stock companies 
took place! In good part, the re-investment was in foreign 
securities and in foreign enterprises; and to this extent they 
represent something that the German economic body really got 
from the indemnity. Large investments were made in Austria, 
especially for Bohemian and Hungarian railway projects. They 
led in that country to a speculative boom the like of which had 
never before been experienced, and which culminated in the crash 
of 1873, the first stage in the world-wide crisis of that year. There 
is evidence also of the purchase in Germany of Italian, Russian, 
Turkish and American bonds. The Germans had begun the pro- 
cess of foreign investment before 1870; it was widely extended 
after that year under the stimulus of the indemnity operations. 
The attainment of the stage of settled and established foreign in- 
vestments was quickened and facilitated. In sum, the Germans 
did get considerable credits and possessions abroad, and the subse- 
quent movement toward expansion of this kind was fairly launched. 
But after all it was not in this way that the major part of the 
indemnity was used. 
Obviously an important part of the entire problem is that of 
the commercial specie movement: how much specie went out of 
France thru the channels of trade, how much went into Germany ? 
Here again our information is unsatisfactory. It is known how 
much specie was handed over directly by the French Government 
to the German Government, and how much the German Treasury 
took for the new gold currency. But how much went out of France 
thru commercial channels, and how much went into Germany in 
' Soetbeer gives for example the following striking figures: 
Total number of stock companies founded in Prussia : 
During the 80 years 1790 to June, 1870 — 279 Companies 
During the 30 months June, 1870, to the close of 1872 — 762 Companies