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<SEC-DOCUMENT>0000891836-05-000230.txt : 20050412
<SEC-HEADER>0000891836-05-000230.hdr.sgml : 20050412
<ACCEPTANCE-DATETIME>20050412162926
ACCESSION NUMBER:		0000891836-05-000230
CONFORMED SUBMISSION TYPE:	DEFA14A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20050412
DATE AS OF CHANGE:		20050412
EFFECTIVENESS DATE:		20050412

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NEW GERMANY FUND INC
		CENTRAL INDEX KEY:			0000858706
		IRS NUMBER:				133555471
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		DEFA14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	811-05983
		FILM NUMBER:		05746475

	BUSINESS ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154
		BUSINESS PHONE:		800-437-6269

	MAIL ADDRESS:	
		STREET 1:		345 PARK AVENUE
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	LENOX FUND INC
		DATE OF NAME CHANGE:	19900115
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEFA14A
<SEQUENCE>1
<FILENAME>sc0107-05.htm
<TEXT>
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<HEAD>
<TITLE>DEFA14A
</TITLE>
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<BODY>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3>The New Germany Fund,
Inc. </FONT></H1>

<P ALIGN="RIGHT"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>April
12, 2005 </FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dear Stockholders: </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Independent Directors of your Fund are writing you this letter to respond to misleading
public criticisms of the Board of Directors from a dissident stockholder. As you may be
aware, Opportunity Partners, L.P., which is controlled by Mr. Phillip Goldstein, has
announced its intention to solicit proxies against the nominees of your Board of Directors
at the upcoming Annual Meeting of Stockholders. Opportunity Partners has also submitted a
proposal that stockholders of the Fund &#147;be afforded an opportunity to realize net
asset value for their shares as soon as practicable.&#148; </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
Fund has experienced strong performance in recent years. The Fund&#146;s total return in
2004 was 24.44% based on net asset value (NAV) and 30.50% based on the market price of
Fund shares. In 2003, it was 93.07% based on NAV and 102.42% based on market price.
Despite this strong performance, Mr. Goldstein and his associates are attempting to
mislead, for their own self-serving purposes, the Fund&#146;s stockholders about the
Fund&#146;s discount, closed-end structure and Board of Directors. If Mr. Goldstein&#146;s
efforts are successful, Mr. Goldstein and his associates will likely take steps to either
open-end or liquidate the Fund, which will allow short-term arbitragers, such as Mr.
Goldstein, to gain while depriving long-term investors of their future investment
opportunities. The Board urges the stockholders not to support Opportunity Partners&#146;
proposals. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=3><U>Opportunity
Partners&#146; Proposals</U></FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
Board strongly believes that Opportunity Partners&#146; proposals are not in the best
interest of the Fund and its stockholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Nominees</U>.
Your Board&#146;s nominees for re-election as Directors are far better qualified
and meet the director qualification requirements in the Fund&#146;s Bylaws,
which require experience in business, investment, economic or political matters
of Germany. In addition, your Board&#146;s nominees will better serve the
interests of <I>all</I> stockholders. In contrast, Mr. Goldstein has conceded
his intended nominees are not qualified to serve as directors under the
Fund&#146;s Bylaws. As such, his nominees may not serve as directors of the
Fund. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Realizing
NAV</U>. While recognizing that the discount is a widely prevalent attribute of closed-end
funds, your Board continues to believe that your Fund&#146;s closed-end format, given its
focus on German small and mid-cap stocks with limited liquidity, is one of its essential
features and that it is in the best interest of its long-term stockholders to remain a

<PAGE>


closed-end fund. A short-term stockholder in a hypothetical liquidation of the Fund on
January&nbsp;1, 2003 would have made a modest one-time gain equal to the discount ($0.98,
assuming no expenses). However, a long-term stockholder who instead held those shares
would have seen a total appreciation of his or her investment by 166% through stock price
appreciation and dividends totaling $5.89 per share at March 31, 2005. Your Board believes
that potential for superior long-term gain is what the majority of stockholders want. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Therefore,
because Opportunity Partners&#146; proposal will benefit only short-term arbitragers, your
Board recommends that you vote against it. We explain our rationale in greater detail
below. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="3"><U>Goldstein&#146;s
Statements vs. the Facts</U> </FONT> </H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr. Goldstein and his associates are attempting to mislead, for their own
self-serving purposes, the Fund&#146;s stockholders about your Fund&#146;s
discount, closed-end structure and Board of Directors. First, Mr. Goldstein and
his associates pretend that a discount deprives stockholders of value and that
in order to capture that value your Fund must convert to an open-end fund or
liquidate (either quickly or through a series of tender offers). Second, in
recent public statements Mr. Goldstein has suggested that your Board of
Directors is not acting in the interests of stockholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This is simply not the case. Here are the facts: </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
your Board recently declined a request from Mr. Goldstein to waive the long-standing
director qualification requirements in your Fund&#146;s Bylaws because your Board strongly
believes that the interests of the Fund and the stockholders are best served when its
directors have experience in matters relevant to the Fund&#146;s investment business. The
minimum qualifications in the Bylaws are keyed to experience in business, investment,
economic or political matters of Germany, and not to the &#147;agenda&#148; of a
particular nominee. </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
your Board recently declined an invitation from Mr. Goldstein to open-end the Fund or
effect a tender offer or large share repurchase because the Board believes that such
actions do not serve the long-term interests of the Fund&#146;s stockholders. Your Board
believes that the closed-end format is well-suited for the longer term value function of
your Fund because of its investment objective, as proven by its superior performance in
recent years. In addition, tender offers deplete the Fund&#146;s capital, allow short-term
arbitragers to profit, raise the Fund&#146;s expense ratio for long-term investors and
have no long-term effect on the discount. Repeated tender offers result in liquidation.
While your Board will listen to the will of the majority, your Board believes that a vocal
minority should not dictate the interests of the Fund&#146;s long-term stockholders. </FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o </FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
although Mr. Goldstein claims that the stockholders last year approved his non-binding
proposal to open-end the Fund or take similar actions to enable stockholders to realize
NAV, his proposal received a favorable vote from the holders of only 27% of your
Fund&#146;s outstanding shares. The holders of the </FONT></TD>
</TR>
</TABLE>
<BR>

<P ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 2 - </FONT></P>


<PAGE>


<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp; </FONT></TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
majority (55%) of the Fund&#146;s
outstanding shares did not even vote on the proposal, and 17% voted against it. Any
characterization of the vote as sending an important message about wishes from a true
majority of stockholders is just wrong. </FONT></TD>
</TR>
</TABLE>
<BR>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="3"><U>Your Fund&#146;s
Structure and Discount</U> </FONT> </H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;While
your Board recognizes that your Fund&#146;s shares have traded at a discount to their NAV,
your Board believes there may be some misunderstanding about the market discount of your
Fund and other closed-end funds. Discounts are widely prevalent in closed-end funds.
Shares of closed-end funds, such as your Fund, trade on the New York Stock Exchange like
those of IBM or any other public company, and market forces drive share price movements.
In addition, the discount is a function of the NAV and market price, each of which may be
influenced by different factors. In contrast, traditional open-end mutual funds do not
trade on a stock exchange, and must maintain liquidity reserves in order to provide for
stockholder liquidity by standing ready to buy back shares each day at NAV. As a result,
open-end funds usually limit their primary investments to those with an active trading
market, which constrains investment flexibility. Also, open-end funds generally hold
higher cash reserves in order to meet their requirement to buy back shares. This
uninvested cash is a drag on investment returns. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Your
Board believes that your Fund&#146;s closed-end format is one of its essential features.
Your Fund is especially well-suited to the closed-end format because of its investment
focus on small or mid-cap German companies (your Fund is generally over 80%
invested in these small- and mid-cap German companies). This portion of the portfolio is
less liquid than securities of larger companies. Not having to worry about raising cash on
a moment&#146;s notice to buy back shares allows your Fund&#146;s manager to keep your
Fund fully invested and to search out the medium- and smaller-sized German companies that
are your Fund&#146;s mandate. Your Fund&#146;s performance has been excellent in recent
years&#151;up 24% in 2004 and 93% in 2003 in NAV terms. </FONT></P>

<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="3"><U>Some Facts about Mr.
Goldstein</U> </FONT> </H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is hypocritical for Mr. Goldstein to accuse your Board of Directors of not acting in the
interests of stockholders when it is clear that Mr. Goldstein&#146;s motives are not
aligned with the interests of your Fund&#146;s long-term stockholders. Mr. Goldstein and
his affiliates have only recently purchased substantial numbers of your Fund&#146;s
shares, and if Mr. Goldstein&#146;s efforts would result in control, Mr. Goldstein will
likely take steps to either open-end or liquidate your Fund or cause it to make a large
tender offer. In fact, Mr. Goldstein and his affiliates have a history of raiding
closed-end funds for short-term arbitrage gain. These actions, if successful, will deprive
long-term investors of their future investment opportunities and could cripple your Fund
by shrinking its size and increasing its expense ratio (currently one of the lowest among
country funds)&#151;all with no long-term effect on the discount. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
stockholder meeting is extremely important in light of the announcement by Mr.
Goldstein&#146;s Opportunity Partners of its intention to solicit proxies against the
nominees of </FONT></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 3 - </FONT></P>


<PAGE>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>your Board of
Directors and in light of Opportunity Partners&#146; stockholder proposal with
respect to net asset value. <B>Whether or not you plan to attend the Meeting,
and regardless of the number of shares you own, we urge you to vote FOR your
Board&#146;s nominees and AGAINST Opportunity Partners&#146; stockholder
proposal.</B> If you hold your shares in a brokerage or bank account (in
&#147;street name&#148;), your broker or bank cannot vote your shares this year
(as it has in past routine annual meetings) unless you sign and return the proxy
voting form it will send you. You will receive your Board&#146;s proxy statement
and white proxy voting form in a few weeks. Your Board strongly urges you
<U>not</U> to sign any proxy that may be sent to you by Mr. Goldstein or
Opportunity Partners. </FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sincerely, </FONT></P>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Independent Directors
of The New Germany Fund </FONT></P>



<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR VALIGN=Bottom>
     <TH COLSPAN=2></TH>
     <TH COLSPAN=2></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=53% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Ambassador Richard R. Burt </FONT> </TD>
     <TD WIDTH=6% ALIGN=LEFT>&nbsp;</TD>
     <TD WIDTH=39% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Frank Tromel </FONT> </TD>
     <TD WIDTH=2% ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">John H. Cannon </FONT> </TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Robert H. Wadsworth </FONT> </TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Richard Karl Goeltz </FONT> </TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Werner Walbrol </FONT> </TD><TD ALIGN=LEFT>&nbsp;</TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Dr. Franz Wilhelm Hopp </FONT> </TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Peter Zuhlsdorff </FONT> </TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp; </FONT> </TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Ernst-Ulrich Matz </FONT> </TD><TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp; </FONT> </TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp; </FONT> </TD></TR>
</TABLE>

















<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Stockholders are advised to read
the Preliminary Proxy Statement and the Definitive Proxy Statement, when it becomes
available, and any other relevant documents that the Fund will file with the SEC because
they will contain important information. Stockholders and other interested parties may
obtain, free of charge, copies of the Preliminary Proxy Statement and the Definitive Proxy
Statement (when available) and other related documents filed by the Fund at the SEC&#146;s
website (http:/www.sec.gov). The Preliminary Proxy Statement and the Definitive Proxy
Statement (when available) and other related documents filed with the SEC may also be
obtained by a stockholder from the Fund free of charge. Such requests should be directed
by mail to The New Germany Fund, Inc., c/o Deutsche Asset Management, 345&nbsp;Park
Avenue, NYC20-2799, New York, New York 10154 or by telephone to 1-800-437-6269.</B> </FONT></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>- 4 - </FONT></P>


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