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TABLE 6.-Interest funded under agreements and amount to be received over funding period on account of principal and interest

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Total..

115, 000, 000 2 $70,071,023.07

13, 830, 000

9, 000, 000

4,025, 000, 000
4, 600, 000, 000

30, 292, 000
1,939, 000

2,042, 000, 000
5,775,000
6, 030, 000

2, 636, 012. 87

2, 205, C00.00
43, 555. 50

1, 113, 664. 20
402, 465. 00

178, 560,000 28, 784, 297. 37

$24, 614, 885. 00 417, 780, 000. 00 185, 071, 023. 07 16, 466, 012. 87 9, 000, 000. CO 4, 025, 000, 000. CO 4, 600, 000, 000. 00

32, 497, 000. 00
1,982, 555. 50
2,042, 000, 000. 00

6, 888, 664. 20
6, 432, 465. 00

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207, 344, 297.37

481, 674, 781. 29

44, 590, 000 2 21, 970, 560. 43|
62, 850, 000

66, 560, 560. 43

122, 506, 260. 05

62, 850,000.00

32, 327, 635. 00

95, 177, 635.00

11, 577, 260, 885 127, 226, 578. 44 11, 704, 487, 463. 443 10, 554, 582, 592. 83 3 22, 259, 070, 056. 27

1 See "Payments postponed."

2 Represents difference between funded principal and total face amount of bonds delivered or to be delivered under the funding agreements, which difference arises through permitting the governments to fund a part of the interest accruing over the periods specified in the agreements (Czechoslovakia, first 18 years; Rumania, first 14 years).

3 Exclusive of $53,870,533.27 interest on payments postponed during the fiscal year 1932 under moratorium agreements; exclusive of interest on principal amounts postponed in accordance with terms of funding agreements in certain instances, and exclusive of interest on principal amounts not paid when due.

NOTE. This table has been prepared on basis of original funding agreements and does not include accrual of interest in those cases where principal amounts have not been paid as provided for in such agreements.

Table 5 shows 3 in each case the principal and interest at the time of funding, the credit allowance, the cash payments upon execution of the agreements, and total debt as funded.

Table 6 shows for each government the amount of the debt as funded, the interest funded under the debt agreements, the amount that the United States was scheduled to receive over the funding period on account of interest (exclusive of interest to be received under the moratorium agreements), and the total amount which the United States was scheduled to have received under the original funding agreements if the payments provided for in such agreements had been made in the amounts and on the dates indicated therein.

Concessions in debt settlements.-It should be recognized that the United States in its settlements with its various debtors did not, with one exception, directly cancel any of the principal of the debt. This exception arose in the settlement concluded with Estonia, under which the United States agreed to a reduction of $1,932,923.45 in the principal of the Estonian debt because of the loss of a cargo of surplus war material when a steamship was sunk by a mine in the Baltic Sea in September 1919. With this exception the only reductions under the debt settlements were reflected in a reduction in the interest rate. The obligations originally acquired by the United States from its foreign debtors generally bore interest at the rate of 5 percent per annum. In a very few cases the rate was 6 percent. The funding agreements made with the foreign debtor nations provide for payments

3 It will be noted that 5 countries listed in table 3 do not appear in tables 4 and 5. The explanation is as follows: The debts of Armenia and Russia were not funded; the debts of Cuba and Liberia were paid in full prior to funding (see table 8). The unpaid portion of the debt of Nicaragua was canceled by treaty of April 14, 1938, in consideration of Nicaraguan acceptance of a settlement of certain tax claims against the United States.

over a period of 62 years (except in the case of the Austrian settlement, which provides for a period of 40 years), with interest at varying rates, all considerably under 5 percent.

Moratorium

In June 1931, to allay the spread of a financial panic that was causing large withdrawals of funds from Germany, and threatening her banking and credit structure, President Hoover offered, subject to congressional approval, to suspend during the fiscal year 1932 all payments due the United States on account of the indebtedness of foreign governments, provided that the important creditor powers would take similar action with respect to reparations and intergovernmental debts due them. The offer was accepted in principle by all the important creditor governments. The authority to postpone payments due the United States was provided in a joint resolution of Congress approved on December 23, 1931, which provided for the postponement of the amounts due during the fiscal year 1932 (July 1, 1931, to June 30, 1932), and their repayment over a period of 10 years beginning July 1, 1933, with interest at the rate of 4 percent per annum. It also authorized the Secretary of the Treasury to conclude agreements carrying into effect the moratorium proposal.

Agreements were concluded with the various debtors, making effective the President's proposal.

The following statement shows the date of the moratorium agreement with each foreign debtor, the amount postponed, the annuities payable over a period of 10 years, and the total amount to be received over that period by the United States:

TABLE 7.-Dates of moratorium agreements, amounts postponed, and payments to be received over the 10-year period

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$287, 556. 00
7,950,000.00
3, 000, 000. 00
492, 360. 19 600, 373. 06
257, 295. 00 312, 295.00
38, 636, 500.00 50, 000, 000. 00
131, 520, 000. 00 159, 520, 000. 00
449, 080. 00 1, 109, 080. 00
57, 072. 75
2, 506, 125.00
205, 989. 96
185, 930. 46
6, 161, 835.00

69, 342.75 14, 706, 125. 00 250, 654. 16 224, 545. 46 7,486, 835.00 800,000.00

$34, 767. 23 968, 907. 76 365, 625. 56 73, 170. 58 38, 061. 00 6, 093, 759. 44 19, 441, 530. 10 134, 274. 76 8, 451. 16 1,792, 311. 76 30, 548. 52 27, 366. 52 912, 459. 42 97, 500. 16

$347, 672.30 9, 689, 077.60 3,656, 255.60 731, 705. 80 380, 610.00 60, 937, 594. 40 194, 415, 301.00 1, 342, 747. 60

84, 511. 60

17,923, 117.60 305, 485. 20 273, 665. 20

9, 124, 594. 20 975, 001. 60

62, 094, 618. 07 184, 222, 188. 36 246, 316, 806. 43 30, 018, 733. 97 300, 187, 339.70

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1 This government did not accept the provisions of the moratorium, and did not pay the amount due during the fiscal year 1932 amounting to $250,000.

2 Expressed in reichsmarks.

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Payments postponed

Austria. The payments due from the Government of Austria on January 1, 1933, 1934, and 1935, aggregating $1,207,742 under the funding agreement of May 8, 1930, and $69,534.46 under the moratorium agreement of September 14, 1932, were postponed at the request of the loan trustees, as provided for in the funding and moratorium agreements. In further accord with the agreements, in exchange for the unpaid annuities during the fiscal year 1937 there were received from the Austrian Government bonds aggregating $3,489,482.75; evidencing annuities payable by that Government annually from January 1, 1944, to January 1, 1968.

Finland.-Under joint resolutions approved June 15, 1940 (Public Res. 84, 76th Cong.) and June 12, 1941 (Public Law 110, 77th Cong.), the Republic of Finland, at its option, could. postpone the payment of amounts payable to the United States during the period from January 1, 1940, to December 31, 1942, inclusive. In such event, the Secretary of the Treasury was authorized to make agreements with Finland for the payment of the postponed amounts. Pursuant to the first of these resolutions, Finland postponed the payment of the sum of $235,298 which was payable on December 15, 1940. Under the terms of an agreement dated May 1, 1941, Finland is required to pay annually $27,390.12, beginning on June 15, 1941, each payment to be made in two installments. In accordance with the second of the joint resolutions, Finland postponed payment of a total of $845,287.24, which had been due over a period from June 15, 1941, to December 15, 1942. The amounts postponed under this resolution are payable under the terms of an agreement dated October · 14, 1943, by which Finland is required to pay 20 annuities of $42,264.36 each, in semiannual installments, beginning January 1, 1945.

Present status of Allied debts.-Tables 4 and 8 show the status as of July 1, 1947, of the indebtedness of Allied governments (plus the Austrian debt referred to Germany) to the United States and total payments received as of July 1, 1947.

Table 9 shows total receipts by fiscal years on account of these debts from the time of funding to July 1, 1947.

TABLE 8.-Total payments received on account of World War indebtedness of foreign governments to the United States as of July 1, 1947

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$52, 191, 273. 24 $17, 100, 000. 00
12, 286, 751.58

20, 134, 092. 26 19,829, 914.17
1, 248, 432. 07

7,854, 361. 71

$14, 490,000.00 $2,057, 630.37 $18, 543, 642.87 10, 000, 000.00

1, 246, 990. 19

1,375, 500. 41

6, 169, 546. 03

486, 075, 891.00 161, 350, 000.00

862, 668.00

862, 668.00

2,286, 751.58 304, 178. 09

1, 441.88 309, 315. 27

38, 650,000.00 64, 689, 588. 18 221, 386, 302.82

2,024, 848, 817. 09 232, 000, 000. 00 1, 232, 770, 518. 42 202, 181, 641. 56 357, 896, 657. 11

4, 127, 056. 01

556, 919.76

100, 829, 880. 16 37. 100, 000.00

761, 549.07

36, 471.56

981,000.00
73,995. 50

Liberia

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9, 200.00 234, 783.00 1,287, 297. 37

1,983, 980.00
482, 171. 22
5, 766, 708. 26
621, 520. 12

1, 001, 626. 61 19, 310, 775.90

See footnotes at end of table, p. 13.

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TABLE 8.-Total payments received on account of World War indebtedness of foreign governments to the United States as of July 1, 1947-Continued

Rumania 3.

Country

Russia

Yugoslavia.

Total.

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2, 751, 997, 084. 27 476, 129, 358. 45 1, 322, 522, 898. 21 281, 990, 396. 99 671, 354, 430. 62

1 Includes cash received upon execution of debt-funding agreements amounting to $4,768,606.14, of which amount $600,639.83 was applied on principal and $4,167,966.31 on interest.

2 The German Government was notified that the Government of the United States would look to the German Government for the discharge of the indebtedness of the Government of Austria to the Government of the United States.

3 Excludes token payment of $100,000 by Rumanian Government on June 15, 1940.

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! Includes $1,433.01 on unfunded indebtedness.

2 Does not include token payment of $100,000 by Rumanian Government on June 15, 1940.

3 Payments due Dec. 15, 1940, to Dec. 15, 1942, inclusive, postponed under joint resolutions approved June 15, 1940, and June 12, 1941.

THE GERMAN DEBT-WORLD WAR, 1917-21

The Government of Germany is indebted to the United States on account of the costs of the American Army of Occupation and the awards of the Mixed Claims Commission, United States and Germany.

Army costs. The gross amount originally due the United States on account of Army costs was 292.7 million dollars. Various German credit items reduced this sum to 247.9 million dollars. Payments were received on account of this debt under several successive plans: (a) The Wadsworth agreement of May 25, 1923, provided for the payment of American Army costs in 12 yearly installments beginning on December 31, 1923. About 14.7 million dollars was received from Germany under this plan before it was superseded by the Finance Ministers' agreement of January 14, 1925, which arranged the distribution of Dawes plan annuities.

(b) By the terms of the Finance Ministers' agreement of January 14, 1925, the United States was to receive the sum of 55,000,000 gold marks per year on account of Army costs (13.1 millon dollars at 1925 exchange value of 23.8 cents per mark). The total amount actually received under this arrangement was 39.2 million dollars.

(c) In 1929 the Dawes plan was superseded by the Young plan, which allocated to the United States an average annuity of 66,100,000 reichsmarks a year for 37 years and a flat annuity of 40,800,000 reichsmarks a year for a period of 15 years thereafter. Of the total allocated to the United States, an average annuity of 25,300,000 reichsmarks a year (about $6,000,000 at 1930 exchange value of 23.8 cents per mark) for 37 years was fixed by the United States as the amount applicable to the costs of the American Army of Occupation. At the date (September 1, 1929) on which the Young plan became effective, the amount due the United States on account of Army costs had been reduced to 193.9 million dollars. A further reduction of 29.3 million dollars was effected by United States agreement_to cancel 10 percent of the original sum, in accord with similar cancellations by France and Great Britain, leaving a balance of 164.7 million dollars.

(d) The funding agreement of June 23, 1930, between the United States and Germany required the payment of the sums set by the Young plan on account of Army costs. (The total of the payments called for, over the 37-year period, at the 1930 par of exchange, amounts to about 249.7 million dollars. The difference between this figure and the balance of 164.7 million dollars mentioned above represents, in part, compensation to the United States for the extension of the repayment period beyond that contemplated in the January 1925 agreement.)

The funding agreement also provided for delivery by the German Government to the United States of bonds in the principal amount of 997.5 million marks, as evidence of its indebtedness (see table 10). The payment of two of these, in the principal amount of 12.65 million marks each, due on September 30, 1931, and March 31, 1932, was postponed under the moratorium arrangements of 1932. Subsequent principal payments on account of Army costs, interest payments, and annuities under the moratorium agreement have not been paid.

German indebtedness as of July 1, 1947, under the funding agreement of 1930 and the moratorium agreement of 1932, as well as total payments received on account of Army costs under these agréements, are shown in table 10.

Mixed claim's

A Mixed Claims Commission was created by agreement of August 10, 1922, between the United States and Germany, with authority to determine and adjudicate the amount of all claims of the United States and its nationals against Germany based on the terms of existing treaties. This Commission entered and certified to the Treasury for payment awards in favor of American nationals in the approximate amount of $139,300,000. Under the provisions of the Finance Ministers' agreement above-mentioned, the United States was to receive out of the Dawes annuities for account of these awards 2% percent of all receipts from Germany available for reparation payments (after deducting prior charges), provided that not more than 45,000,000 gold marks could be received in any one year. As indicated above, the Dawes plan was superseded in 1929 by the Young plan. Of the 66,100,000 reichsmarks allocated to the United States under the Young plan, a flat annuity of 40,800,000 reichsmarks for 52 years was fixed by the United States as the amount applicable to mixed claims

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