Foreign Bondholders Protective Council, inc.

Transcription

Foreign
Bondholders
Protective Council, inc.
ANNUAL REPORT 1939
Ninety Broad Street
New York, N.Y.
Copyright, 1940
Foreign Bondholders Protective Council, Inc.
Printed in the United States of America
By Lenz & Riecker, Inc., New York
Officers and Directors
Officers
Francis White, President
J. Reuben Clark, Jr., Chairman, Executive Committee
Laird Bell, Vice-President
Dana G. Munro, Vice-President
Herman L. Ekern, Treasurer
A. H. Wylie, Secretary and Assistant Treasurer
Aristides Moreno, Assistant Secretary and Economist
Executive Committee
Laird Bell
Hendon Chubb
Chicago
New York
Salt Lake City
J. Reuben Clark, Jr
James Grafton
Rogers
New Haven
New York
New York
Baltimore
Thomas D. Thacher
John C. Traphagen
Francis White
Auditing
Pierre Jay
Committee
,
New York
Philadelphia
Chicago
Roland S. Morris
Quincy Wright
3
Directors (1939)
Chicago
Laird Bell
Lawyer, Bell, Boyd & Marshall
Hendon Chubb
Chubb & Son, Marine Insurance
Director and Member of Finance Committee, The Prudential
Insurance Company of America
J. Reuben Clark, Jr
New York
Salt Lake City
Director, Equitable Life Assurance Society
Director, Utah State National Bank
Former Under Secretary of State and Former Ambassador to Mexico
Madison, Wis.
Herman L. Ekern
Former Attorney General of Wisconsin
Pierre Jay
New York
Chairman, Fiduciary Trust Company
Former Chairman of Board, Federal Reserve Bank of New York
Philadelphia
Roland S. Morris
Director, Mutual Life Insurance Company of New York
Former Ambassador to Japan
Princeton, N. J.
Dana G. Munro
Director, School of Public and International Affairs, Princeton University
Former Chief of Division of Latin American Affairs, Department of State and
Former Minister to Haiti
James Grafton Rogers
New Haven
Master, Timothy Dwight College, Yale University
Former Assistant Secretary of State
Thomas D. Thacher
New York
Simpson, Thacher & Bartlett
Fellow, Yale Corporation
Former Judge, United States District Court, Southern District of New York
Former Solicitor General of the United States
John C Traphagen
New York
President, Bank of New York
Trustee, Rockefeller Institute for Medical Research
Francis White
Trustee, The Johns Hopkins University
Baltimore
Former Assistant Secretary of State and Former Minister to Czechoslovakia
Quincy
Chicago
Wright
Professor of International Law, University of Chicago
4
ANNUAL REPORT 1939
The war in Europe has brought about so many sudden
changes in the economic and financial as well as the political
situation that any attempt to depict the status of the various
bond issues is not only apt but almost inevitably bound to be
out of date by the time of publication. In view thereof, the
Council has considered it preferable to issue this year a briefer
report limited to a discussion of its activities during the year
and a recapitulation of the outstanding indebtedness, reserving
for a subsequent report the resumption of the fuller description
of each bond issue customarily given.
The Council's general views regarding the repatriation of
bonds, clearing agreements, inter-governmental debts, and the
general default situation remain as set forth in the Council's
Report for 1938, to which reference is made. The Council
limits itself at this time to repeating in the strongest possible
terms its protest against the practice of many governments in
buying up for repatriation their dollar bonds while making
either no service whatsoever or offering what amounts to a
token payment. Unfortunately, certain debtors still carry on
this reprehensible practice.
As in previous years, the Latin American countries have the
largest percentageof their bonds in default. In this connection,
however, it should not be lost sight of that Argentina, Cuba,
the Dominican Republic, Haiti and Uruguay have either continued throughout to pay full interest on their bonds or have
offered and carried out fair and equitable adjustments on their
bond service.
On December 31, 1939 there were $1,610,331,794 dollar
bonds of Latin America outstanding. Of this amount approximately 77.2% were in total or partial default. The European
defaults were approximately 58.2%, the Far Eastern approximately 1.8%, and Canadian 4.9%.
5
6
foreign bondholders protective
council, inc.
Of the total outstanding dollar bonds of Latin America 77%
represent bonds of the Federal Governments or bonds guaranteed by such Governments. Of these, more than 75% are in
default. Bonds of States, Departments, and Provinces in Latin
America make up 17% of the total outstanding, and of these
76% are in default. Municipal bonds represent 6% of the total
and all are in default.
Of the $5,553,517,206 total outstanding dollar bonds,
$3,006,581,084 or 54% pertain to the national central governments, of which $1,413,432,337 or 47% are in default. Corporations, such as central banks, mortgage banks, etc., whose
bonds are guaranteed by governments, amounted to $906,426,468, of which $233,251,001 or 25.7% are in default. It will thus
be noted that the debts of the central governments make up
the bulk of the debt. State, Provincial and Departmental debts
totaled $1,079,384,090, of which $360,626,190 or 33.4% are in
default; and Municipal bonds totaled $561,125,564, of which
$194,153,960 or 34.6% are in default.
An account of the work done by the Council since its inception, setting forth the difficulties with which the Council has
been confronted, is contained in an article entitled, "Collecting
on Defaulted Foreign Dollar Bonds", by the Honorable J.
Reuben Clark, Jr., quoted herewith, as printed in the American
Journal of International Law, Volume 34, Number 1, January,
1940:
The Foreign Bondholders Protective Council, Inc., was organized in December, 1933, for the purpose of securing resumption of service interest and
—
amortization on
—
defaulted foreign dollar bonds then amounting to about
$2,500,000,000 issued by some 23 countries. The Council concluded its first
negotiations in February, 1934. Since then there has been actually paid
to American bondholders, on account of the interest only of such defaulted
bonds, $103,938,000 in cash and $37,204,000 in scrip— a grand total of
$141,142,000. This has been done on a total expense account for the Council
(covering the whole of the Council's work) of thirty-four hundredths of one
per cent (.0034%) on the amount of interest so actually paid to bondholders,
or of twenty-seven thousandths of one per cent (.00027%) on the face value of
the bonds concerning which the Council has negotiated. It may be added that
of the total sum of $2,500,000,000 of defaulted bonds, the Council has since its
organization negotiated regarding the resumption, continuance, or increase of
ANNUAL REPORT FOR NINETEENTHIRTY-NINE
7
service on over $1,773,000,000. Of this sum, permanent settlements were arranged as to $245,000,000 and temporary settlements covering $1,528,000,000.
The Council was formed by a group of gentlemen who had been personally
requested to set it up by the Honorable Cordell Hull, Secretary of State, the
Honorable William H. Woodin, Secretary of the Treasury, and the Honorable Charles H. March, Chairman of the Federal Trade Commission. It was
created in lieu of the organization of the Corporation of Foreign Security
Holders provided in Title 2 of the Securities Act of 1933,1 after the Administration had determinednot to establish that body.
Following a meeting between President Roosevelt and the organizers in
October, 1933, the White House issued a formal statement approving the
creation of the Council, stating the need therefor, and outlining certain
general principles that should govern its work. The Council was not to be a
profit organization, was to carry on at the lowest possible expense to the
bondholders, was to decide its own affairs independently, and Administration officials were stated to "have no intention, however, of seeking governmental direction or control of the organization, nor will they assume
responsibility for its actions." The Council has carried on its work in
accordance with these principles.
The Council does not represent the bondholders legally. It cannot negotiate settlements that are binding upon them. It has never called for deposits
of bonds. The regular procedure of negotiation by the Council is this: It
approaches the defaulting debtor on dollar bonds in an effort to induce it
to resume or to increase its interest and sinking fund service on its bonds in
accordance with the bond contract. Whenever the defaulting debtor can be
so induced, the Council enters into negotiations with the debtor to secure
from it the best possible offer of service. When the debtor makes the offer,
the Council follows one of three courses: it tells the bondholders the offer is
fair and equitable under all the circumstances, if in the Council's judgment
such are the facts; or if the Council believes the offer is unfair, it tells the
bondholdersso, and may recommend against the acceptance of the offer by the
bondholders; or the Council may pass the offer on to the bondholders without
any expression of opinion. In no event is the bondholder bound either to
accept or reject the offer; he is in no way committed either for or against
the offer; he makes his own decision about it. The offers arranged for by
the Council always run to each and every bondholder, and not to a selected
group only.
Believing that the world-wide depression made it undesirable, both for
the bondholder and the defaulting debtor, to attempt to make final arrangements on the debt, the Council has endeavored to get the defaulting debtors
to offer a temporary service covering a few years, the permanent settlement to
come later when the condition of the world became more normal. However,
some of the debtors have insisted on permanent arrangements now, seemingly
in the belief that the present was their most opportune time for adjustments.
Of the approximately $2,500,000,000 foreign dollar bonds in default when
the Council was organized, approximately $1,200,000,000 were Latin American dollar bonds, and $1,300,000,000 were European dollar bonds.
The following table shows the approximate amount of interest service,
both cash and bonds (funding) which were offered to holders as the result of
either temporary or permanent adjustments negotiated by the Council from
the time of its organization up to the end of 1939. These figures do not
include sinking fund payments made under any plan, but merely those payments made for interest.
M8
U. S. Stat. L., p. 92.
8
FOREIGNBONDHOLDERS PROTECTIVE COUNCIL, INC
Period for
Which Interest
Was Offered
$ 375,965,035 3-3V2 yrs.
Brazil (temporary)
1,066,786,000 1yr.
Germany (temporary)
Germany (temporary)
2y
2 yrs.
16,292,500 SJA5 JA yrs.
Dominican Republic (permanent).
72,605,424 4 yrs.
Buenos Aires (permanent)
10,489,351 2-2^ yrs.
Costa Rica (two temporary)
China Treasury notes
5,500,000 2y
(permanent)
2 yrs.(d)
7,500,000 2 yrs.
China Hukuang (permanent)
11,468,000 2-2y2 yrs.
Hungary non-State (temporary).
Cuban Public Works
40,000,000 3y
(permanent)
2 yrs.(f)
42,366,300 3-4 yrs.
Yugoslavia (two temporary)
Poland (two temporary and one
permanent), including Silesia
53,851,980
yr-(h
and Warsaw
).A
l
(g)
7 mos. (l)J
Outstanding
When
Adjusted*
—
——
..
....
l^yrs.(j)
52,947,500 2 yrs.
4,863,500 2 yrs.
4,327,000 2y
2 yrs.
Uruguay (permanent)
Montevideo (permanent)
Mendoza (permanent)
Santa Fe, Province and City
(permanent)
8,859,200 1 yr.
$1,773,821,790
Cash
$ 32,678,707
Bonds
32,640,000(a)
1,759,950(b) $29,332,500(c)
4,810.095
10,489,968
519,863
343,750
375,000
436,741
1,058,750
4,450,250
4,111,594
3,476,800
2,890,000
3,456,475
2,818,879
3,989,125
360,982
342,400
440,000
(c)
6,443
354,368
$103,938,147
$37,204,493
It is of interest to note that on the permanent settlements, the average
annual interest rate return (at the lowest rate called for under the adjustment plans) has been approximately 4.3%; the sinking fund arrangement has
been approximately 1.2%, or a totalservice of 5.5% per annum.
To meet the expense of all of this work, the Council has spent approxi-
mately $80,000 per year, including rent, clerical help, supplies, preparation
and printing of the Annual Report, statistical service, telephone, telegraph,
traveling expenses, negotiation expenses, officers' salaries, and all incidental
costs whatever.
Being a strictly non-profit organization and having neither capital stock
nor assets, the Council has found difficulty in financing itself. Failing to get
some sort of endowment, it turned to the issue houses and banks on the
theory that as they had profited by the issuance of the bonds they should
contribute to the protection of the rights of the bondholders. This plan had
the express approval of the Administration. Later the Securities and Exchange Commission condemned this plan, and the Council then turned to the
bondholders (from whom it has asked % of 1% of the face value of the
bonds on which it has arranged permanent settlements), and to the debtor
states on the theory that a debtor should bear at least a portion of the costs
of refinancing. The bondholders have in largest part generously responded,
though some (largely foreign holders, American speculators, and arbitrageurs) have accepted the benefits of the Council's work but have refused to
contribute to its support. To remedy this situation the Board of Visitors
(named by the Secretary of State and the Chairman of the Securities and
* Where
—
there are more than one adjustment, the amounts given are for the earliest one.
(a) Based on $1,066,786,000 the figure given in February, 1934, as then outstanding.
(b) Received as 3% interest on $29,332,500 fundingbonds.
(c) Amount issued only.
(d) Cash for 2y2 yrs.; scrip for short-fall during 2y
2 yrs. and for 15 yrs. back interest
at 1%.
(c) Scrip to be, but not yet, issued. $562,500 for short-fall during 2-yr. period and for
6y2 yrs. back interest at 1%.
(f) Cash for 2z/2 yrs.; bonds for 4 yrs.
(g) Amount outstanding under temporary adjustments; $41,185,400 under permanent
adjustment.
(h) 1 yr. under first temporary plan,
(i) 7 mos. under second temporary plan.
(J)
2 yrs. under permanent plan.
ANNUAL REPORT FOR NINETEEN THIRTY-NINE
9
Exchange Commission at the request of the Council) have approved a levy
(the maximumbeing Y% of 1%) on all bonds participating in any adjustment.
Speaking generally, defaulting debtors on dollar bonds, are defaulting, not
because they are unable to pay all or a good part of their debt service, but
simply because they do not have the will to pay. For example, one country
in total default on its dollar bonds since 1932 and 1935, had, during the seven
years of default, a favorable trade balance with the United States of approximately three times the amount of the full contract interest service on
their dollar bonds, yet during all this time it refused either to serve its
bonds or seriously to discuss service, though paying full service on its total
internal debt, even up to 10% per annum. Other cases are almost as flagrant.
Six Latin American countries having a favorable balance of trade with the
United States in 1938 made no interest payments on their bonds for that
year. In contrast with that, four countries Argentina, Dominican Republic,
Haiti, and Uruguay had unfavorable balances of trade with the United States
for 1938, and yet paid full bond interest for that period. There are some defaulting debtors who will make no adequate service, if any at all, upon their
defaulted dollar bonds, except under governmental pressure.
In its work the Council has at all times applied certain principles. It has
steadily refused to discuss or even listen to arguments to the point that the
principal amount of the bonds should be reduced, or that adjustments should
be made that would in effect constitute a reduction. The Council's files contain great numbers of letters showing that there are thousands, if not hundreds
of thousands, of bondholders who bought their bonds at the original issue
prices. These are in great part aged people who invested their life savings in
"government gold bonds" frequently under a sales representation that they
were "better than money in the bank," because the bonds drew a high interest
rate, and bank balances drew a low interest rate. These people write from
hospitals, infirmaries, county poor houses, and bare homes. They say these
bonds represent all they have in the world. The Council has refused to
sacrifice the rights and necessities of these American citizens to the interests
of defaulting debtors, able to pay and lacking only the will so to do.
One of the iniquities of the existing condition of foreign dollar bond defaults is this : While governments allege they are unable to find either funds or
dollar exchange to pay the interest and sinking fund on their bonds, nevertheless, such governments (many, and indeed most of them) have been able
to find both funds and dollar exchange to buy up in our markets their own
bonds at the very low prices at which the bonds are selling due to their own
wilful default. The Council has complained and inveighed against this in
vain. In its 1937 Report the Council said:
"Because of the character of such a transaction as this repatriation of
defaulted bonds, the participants therein do not usually disclose the extent
of their operations, and it is therefore difficult to obtain accurate figures
regarding the extent of the operation. But from such fragmentary information as the Council can secure it would seem that some municipal defaulters
have bought up while in continuous default, as much as 83.5% of their indebtedness outstanding at the timeof default; one country with an outstanding
indebtedness at the time of default of over 850 millions, has repatriated, at
default prices, approximately Yz of the debt. Thirteen countries in default
(on which fairly accurate data have been obtained) had at the time of default
approximately $1,815,347,000 of dollar debt outstanding. These countries have
in some 7 years repatriated approximately 25% of this debt, though all the
time alleging they had not available funds or exchange to serve their bonds."
Government estimates indicate that almost a dozen countries in default
in service payments on their dollar bonds, most of them alleging as a reason
—
—
10
FOREIGN BONDHOLDERS PROTECTIVE COUNCIL, INC.
for their default a lack of dollar exchange, have been able to find enough of
that exchange to repatriate from 15% to 50% of their outstanding dollar
issues.
Another contention which defaulting debtors frequently make is that
their bonds are in the hands of holders who have bought them at the low
prices existing since default, and therefore that the interest should be cut to
what would be a fair return upon the price actually paid. The Council has
refused to yield to this argument because, first, of the great injustice it would
work on the original holders (already referred to), and next because it considers dishonest an argument by a debtor which would put a premium upon
his own wilful default.
In this connection the Council has had constantly in mind that there is a
certain fundamental difference between enterprises and investments made
by Americans in the United States and the same sort of operations undertaken by them in foreign countries. Where the enterprise is domestic, the
national wealth is not much concerned with who, among the people of the
United States, shall gain or lose with reference to that enterprise. If "A"
loses to "B" in such an investment, the property being still in the United
States, the national wealth is not in any way impaired. However, where
the American capital is invested in bonds of a foreign country the situation
is wholly different. This bond investment is an outlay of the national
wealth which is lodged in the foreign country. If the investment is not
returned to the United States, the national wealth has been by that much
depleted. For example, a foreign government borrowing a dollar and paying back 20$' (on the theory that since the particular holder of the obligation at the time of payment had paid only 200 for it, the debtor should be
able to wipe out his obligation by the payment of the 200') > would deplete the national wealth by 800 for every dollar which had been originally
invested.
One of the considerations most frequently urged upon the Council in
connection with an application to reduce either the principal sum of indebtedness or the service (interest and amortization) thereon, has been that of
"capacity to pay" which is, in fact, brought forward rather as incapacity to
pay. This is frequently urged by debtors whose revenues are approximately
at the same height as when the loans weremade, but whose expenditureshave
enormously increased, either for war equipment or for the frills of modern
governmental activities. It will be recalled that the phrase originated in a
discussion between sovereigns with reference to obligations running between
them, and arising out of a joint partnership, political operation, for political
purposes, the World War. If these sovereigns, in such a discussion, wished
in adjusting their sovereign debts to take account of the relative "capacity to
pay" of the sovereign debtors, their partners in the joint enterprise, such was
their sovereign privilege. They were dealing as equals about their own debts,
and could, with reference thereto, be generous or otherwise as suited their
sovereign interests, conveniences, circumstances, or commitments.
The Council has said, however, that neither this phrase, "capacity to
pay", nor the principle it formulates has any proper place whatsoever in a
discussion between a sovereign and his private foreign creditors. A sovereign must be assumed to know when he borrows from private parties whether
or not he will be able to pay, whether or not he is incurring an obligation
within his "capacity to pay". The foreign creditor is not able to determine
this matter for himself, either at the time of the borrowing or thereafter.
Furthermore, whether a sovereign pays, or does not pay, depends in greatest
part upon his will to pay. For few, if any, governments have borrowed
11
beyond their capacity to pay if they really had a will to make the necessary
levy upon the property of their nationals, and to pay. No nation has any
right to invoke its lack of "capacity to pay" its obligations to private creditors until it has fully exhausted its taxing powers, and no debtor sovereign
now in default, in so far as the Council is advised, has even approached a
conditionof exhaustionof its taxing powers.
The Council has announced its intention to continue to take advantage of
every opportunity that may arise to aid the holders of defaulted foreign
dollar bonds.
J. Reuben
Clark, Jr.
Outline of Work of Year 1939
During the year the Council was active in foreign dollar bond
default situations in 19 countries. The principal amount of
outstanding bonds involved in those countries was approximately $1,300,000,000 and included 173 issues.
ARGENTINA
DollarBonds
National
Argentine Republic
Issued Matures Interest
Conversion
1936
1971
Conversion
1937
1972
Conversion
1937
1972
1938
1948
Argentine Republic
Argentine Republic
Argentine Republic
External
Provincial
Buenos Aires External
Buenos Aires Readjustment
Buenos Aires ArrearsCtfs.
Buenos Aires Sinking Fund
Cordoba External
Mendoza External
Mendoza Readjustment
Santa Fe External
Santa Fe Guaranteed
Municipal
Cordoba
Cordoba
Santa Fe
National
Provincial
Municipal
. 1925
1935
. 1935
. 1935
..... 1935
1936
1926
1928
4Y2%
4%
4%
4^%
1947
7l7l
/2%
1975 4y2~4Y^%
1952
7%
1976 4^-4^%
1961
6%
1939
1977 4Ys-4Ys%
1961
6Y%
1976 4^4-4^%
5%
1984
3%
1942
7%
1951
7^%
1954
4%
1942
7%
1964
4%
1927
1927
1927
1957
1937
1945
1930
1933
1925
1926
1937
1924
7%
7%
7%
Issued
Outstanding
23,500,000
22,670,500
70,000,000
67,986,000
35,000,000
34,087,000
25,000,000
24,630,000
[14,472,000]
*10,826,100
[10,600,000]
* 8,764,300
[41,101,000]
*38,878,000
[11,675,000]
*10,904,500
[* 3,232,524]
3,232,524
5,943,000
*[ 6,500,000]
4,327,000
[10,188,000]
*10,309,200
283,500
9,062,000
135,100
6,424,500
548,500
32,286,500
149,500
7,826,000
193,390
2,044,800
4,222,500
338,500
3,700,500
4,574,000
3,291,000
4,669,500
2,547,000
[ 2,122,500]
4,254,500
1,220,000
748,000
Issued
Outstanding
253,901,124
230,676,290
153,500,000
93,184,624
7,216,500
Note
* : Figures in brackets not included in total
Amount of issue authorized.
149,373,500
75,080,290
6,222,500
12
FOREIGN bondholders
protective council,
inc.
Republic: The Argentine Republic has always paid full service, interest
and amortization, on its dollar bonds.
Province of Buenos Aires: As of November 15, 1935 an offer was made to
bondholders to exchange the four Secured Sinking Fund Gold Bonds issued
from 1925 to 1930 for Readjustment Bonds of 1935 (p. 21 Council's 1935
Report). At the same time an offer was made to exchange the 5% Arrears
Certificates for 3% Bonds of 1936. The Council understands that of the four
Secured Loans and the Arrears Certificates, up to the end of 1939, 93.32%
had been converted into New Readjustment Dollar Bonds; 4.94% had been
converted into internal Peso Bonds, making total conversions of 98.26%, and
leaving 1.74% of the original obligations unconverted and outstanding. Offer
will remain open until such date as may be specified hereafter by public
advertisement at least 14 days in advance of the final date for acceptance.
By Decree of June 21, 1937, Province of Buenos Aires 6%>, 6y2%, 7%, 7Yt%
Bonds, and 5% Arrears Certificates, also 4^-^%, 4J4-^%, 4V8 -5/8%, and
4Y2 -Va% Bonds, and 3% Sinking Fund Bonds of that Province could be converted into Argentine Paper Peso Bonds bearing 5% interest and 1% amortization per annum. This offer, published by Irving Trust Co. on June 26,
1937, was valid only until July 3, 1937 (p. 62 Council's 1937 Report). The
following table shows conversions to Internal Peso Bonds and to New Readjustment Dollar Bonds to December 31, 1939:
Bonds Outstanding
When 1935 Offer
Was Made
y2%y2%
y2y2
Exchangedfor
InternalPeso
Bonds
Exchangedto
Dec. 31, 1939 for
NewReadjustment
DollarBonds
$10,826,100
8,764,300
38,878,000
10,904,500
3,252,524
$ 263,100
172,500
1,003,500
1,771,000
379,234
$10,330,000
$72,625,424
$3,589,334
$67,777,600
8,477,700
37,326,000
8,984,000
2,659,900
Province of Cordoba: On the 7% issue of 1942 interest is being paid in
full although the sinking fund has been in default since January 1, 1933.
Province of Mendoza: On June 1, 1938 holders of the 7.50% bonds due
1951 were offered new Province of Mendoza 4% External Readjustment
Sinking Fund Dollar Bonds, dated December 1, 1937, due December 1, 1954,
guaranteed by the National Government of the Argentine Republic as to
principal, interest and sinking fund (p. 65 Council's 1938 Report). Of the
$4,327,000 7.50% bonds outstanding when the offer was made, $3,988,500, or
more than 92%, had accepted the offer and converted their bonds to December
31, 1939.
Province of Santa Fe: True to its past honorable record in debt matters,
the Argentine Government in 1939 guaranteed a new issue of bonds of the
Province of Santa Fe which also covered the outstanding bonds of the City
of Santa Fe. In September 1939 an offer was made to the holders of Province
of Santa Fe Public Credit External 7% Sinking Fund Gold Bonds, dated
September 1, 1924, due September 1, 1942, and City of Santa Fe 7% External
Secured Sinking Fund Gold Bonds, dated April 1, 1927, due April 1, 1945,
to exchange these bonds for new 4% bonds of the Province which are fully
guaranteed by the National Government. As the Argentine Government has
punctually met the service on all its outstanding dollar bonds, the Council felt
that the new bonds, unconditionally guaranteed by the Argentine National
Government, offered the bondholders a satisfactory settlement consistent
13
with the broad equities and long view interests of the bondholders, being,
indeed, in some respects distinctly advantageous to them over their previous
situation. The Council, therefore, recommended this offer to the favorable
considerationof the bondholders.
The new bonds, known as the Province's "4% External Guaranteed Sinking Fund Dollar Bonds," are limited to $10,309,200 principal amount, of which
$8,859,200 was made available under the offer, the balance being subject to
issuance in connection with the adjustment of the short-term dollar debt of
the Province. The new bonds were dated March 1, 1939 and mature March
1, 1964, and bear interest at the rate of 4% per annum. Principal and interest
are payable in lawful currency of the United States. The new bonds
are to be retired at or before maturity through a cumulative sinking
fund operating semi-annually after September 1, 1939, either through delivery
of bonds or through purchase at or below par, or by drawings at par. The
Province or the National Government may increase any sinking fund payment, and redeem the new bonds apart from the sinking fund, as a whole or
in part, at their principal amount.
The National Government, in accordance with the Unification of Taxes
Law of December 24, 1934, has unconditionally guaranteed the due and
punctual payment of the principal of, and interest and sinking fund on, the
new bonds.
Holders of the above mentioned 7% bonds of the Province of the denomination of $1,000 who assented to the Readjustment Plan of June 6, 1934, and
whose bonds were accordingly stamped to evidence the addition to the principal amount thereof, of a sum equal to 11% of such principal in satisfaction
of overdue interest due September 1, 1932 to March 1, 1934, inclusive (which
addition, however, did not increase the amount of interest payable upon the
bonds), are entitled to receive, upon tender of their stamped bond with all
coupons maturing on and after September 1, 1939, in addition to $1,000 principal amount of new 4% bonds due 1964, $50 in convertible scrip. Proportionate provision was made for the holders of bonds in the denomination of
$500 by issuing, if necessary, convertible scrip certificates in the denomination
of $25.
Holders of the City of Santa Fe 7% bonds, who assented to the Readjustment Plan dated December 31, 1934, as amended, are entitled to receive, upon
tender of their stamped bonds with all coupons maturing on and after October
1, 1939, an equal principal amount of new bonds.
Holders of bonds of the Province and City of Santa Fe who have not yet
assented to the respective Readjustment Plans, may likewise tender their
bonds under the present offer, and are thereupon entitled to receive any payments with respect to back interest payable to assenting bondholders under
such plans, and in addition to the same principal amount of new bonds (and,
in the case of the Province, the same face amount of convertible scrip) as
in the case of those who have heretoforeassented to such Readjustment Plans.
The convertible scrip certificates described above, if combined in a face
amount of $100 or multiple thereof, are exchangeable at an}' time on or before
March 1, 1944, for an equal principal amount of new bonds, on which interest
will have accrued from March 1, 1939. All rights in respect of scrip certificates
expire at the close of business March 1, 1944, except that the holders thereof
shall be entitled to receive their pro rata portion of the proceeds resulting
from the sale of the new bonds held in respect of such scrip certificates.
City of Cordoba: On the 7% bonds of the 1937 issue, no payments were
made during 1939 as to interest, sinking fund, or principal which defaulted
November 15, 1937. In November 1939, the fiscal agents announced that they
14
had instituted judicial action and had secured judgment against the City for
the full amount of the unpaid principal and interest, and that an attachment
of pledged revenues had been granted by the Court, subject to prior similar
attachments. Owing to the small collections the announcement indicated that
no substantial payments to bondholders may be expected from that source
in the near future.
On the 7% bonds of the 1957 issue, to those depositing their bonds with
White, Weld & Co. payments were made of $111.95, which, less expenses of
$28.10 charged to the bondholders, netted $83.85 for the August 1, 1937 and
February 1, 1938 coupons, and for one further interest payment subsequent
to February 1, 1938; while those depositing their bonds with the Bondholders
Committee for City of Cordoba, Class I, payments were made of $130.30,
which, less expenses of $47.88 charged to the bondholders, netted $82.42 for
the August 1, 1937 and February 1, 1938 coupons, and for one further interest
payment subsequent to February 1, 1938.
OtherExternalObligations Outstanding
54,034,654
£
129,932,450
Swiss Francs
88,283,500
Pesetas
40,085,500
French Francs
3,527,100
Gold Pesos
AUSTRALIA
Dollar Bonds
Issued Outstanding
Commonwealth of Australia.. 1925
1955
5% 75,000,000 71,831,000
1957
5% 40,000,000 36,212,000
1956
4V2% 50,000,000 45,062,000
National
State
State of New South Wales...
State of New South Wales
State of Queensland
State of Queensland
...
Municipal
City of Brisbane
City of Brisbane
City of Brisbane
City of Sydney
Corporate (Government
Guarantee)
Metropolitan Water Board...
(Sydney)
1922
1957
1958
1941
1947
5%
5%
7%
6%
25,000,000
25,000,000
12,000,000
10,000,000
21,193,500
21,310,000
8,349,500
9,203,000
1927
1928
1930
1930
1957
1958
1950
1955
5%
5%
6%
5^%
7,500,000
7,500,000
5,000,000
10,000,000
6,221,000
6,355,000
4,373,000
9,123,000
1930
1950
5H%
7,500,000
6,952,000
1927
1927
1921
National
State ..
Issued
Outstanding
165,000,000
72,000,000
153,105,000
60,056,000
26,072,000
6,952,000
30,000,000
Municipal
Corporate (Govt. Guarantee)
7,500,000
274,500,000
246,185,000
amortization,
has been paid on all these loans.
Full service, interest and
£
461,019,394
15
BELGIUM
DollarBonds
National
Kingdom of Belgium.. 1924
1925
Kingdom of Belgium.
Kingdom of Belgium.. 1925
.
Municipal
City of Antwerp
1928
National
Municipal
Outstanding
Issued
1949
1955
1955
6%%
6^%
6%
7%
30,000,000
50,000,000
50,000,000
23,091,000
24,902,400
38,609,000
1958
5%
10,000,000
9,700,000
Issued
Outstanding
130,000,000
10,000,000
86,602,400
9,700,000
140,000,000
96,302,400
Full service, interest and amortization, has been paid on all these loans
through 1939. It is understood that approximately 69% of the National bonds
are held by the Belgian Treasury.
Following the German occupation in 1940 the City of Antwerp defaulted
on interest due June 1, 1940.
£
French Francs
Florins
Swedish
'Kronor ".'.'.'.'.'.'.'.'.'.'.'.'.'.'.
13,174,100
1,339,340,000
47,189,000
19^021^000
Outstanding IndebtednessOwed to the U.S.Government
$457,552,820.78, principal and interest, as of December 31, 1939, which is in default
BOLIVIA
National
Republic of Bolivia
Republic of Bolivia
Republic of Bolivia
Republic of Bolivia
National (not publicly
offered)
Republic of Bolivia
(Match Loan)
Dollar Bonds
Issued
Outstanding
1917
1922
1927
1940
1947
1958
1969
6%
8%
7%
7%
2,400,000
29,000,000
14,000,000
23,000,000
1,296,000
22,072,000
13,364,000
22,690,000
1930
1950
7%
2,000,000
1,188,975
70,400,000
60,610,975
1928
The four publicly offered loans of Bolivia went into default in 1931 and no
been made since that time. Interest in default to the end of
1939 amounts to $38,820,116, making a grand total owed by Bolivia of
payments have
$99,431,091.
The Council was in communication with the President of Bolivia when
his untimely death occurred. The provisional government that succeeded was
followed by a new government in April 1940, and the Council hopes it may
be possible to conclude a fair and equitable arrangement with that government.
16
BRAZIL
Dollar Bonds
1921
1941
8%
1922
1952
7%
1926 1957 6y2 %
1927
1957 61A%6 lA%
1951
1931
5%
National
U. S. Brazil
U. S. Brazil
U. S. Brazil
U. S. Brazil
U. S. Brazil (Funding)
State
Ceara
Maranhao
Minas Geraes
Minas Geraes
Pernambuco
Rio de Janeiro
Rio Grande do Sul
Rio Grande do Sul
Rio Grande do Sul
(Consolidated Municipal)
Rio Grande do Sul
Santa Catharina
Sao Paulo
Sao Paulo
Sao Paulo
Sao Paulo
Sao Paulo
Municipal
Porto Alegre
Porto Alegre
Porto Alegre
Rio de Janeiro
Rio de Janeiro
Rio de Janeiro
Sao Paulo
Sao Paulo
Sao Paulo
National
State
Municipal
1947
8%
1958
7%
1958 6^%
(>y
1959
2%
1958
7%
1947
7%
1959 6%%
1946
8%
1966
7%
2,000,000
1,750,000
8,500,000
8,000,000
4,860,000
6,000,000
6,000,000
10,000,000
10,000,000
1,980,000
1,682,000
8,132,000
7,812,000
3,026,000
4,910,000
5,324,000
1930
1967
1968
1947
1936
1950
1956
1968
1940
7%
6%
8%
8%
8%
7%
6%
7%
4,000,000
23,000,000
5,000,000
10,000,000
15,000,000
7,500,000
15,000,000
35,000,000
3,912,500
17,840,000
3,396,000
4,568,000
14,719,000
6,914,000
14,698,000
18,012,000
1921
1961
8%
7%
8%
6y2%
6%
6%
8%
l
6l6/2%
3,500,000
4,000,000
2,250,000
12,000,000
30,000,000
1,770,000
8,500,000
4,000,000
5,900,000
2,793,500
3,025,000
1,601,000
7,317,000
24,826,000
1,267,000
5,409,000
3,156,500
5,602,000
1928
1928
1929
1928
1927
1929
1921
..
Outstanding
31,352,500
17,503,000
56,108,000
39,709,000
24,099,245
1922
Parana
Issued
50,000,000
25,000,000
60,000,000
41,500,000
29,884,545
1926
1927
1928
1922
1921
1925
1926
1928
1926
1928
1921
1928
1928
1919
1922
1927
1966 7y2%
1968
1946
1953
1933
1943
1952
1957
Issued
5,900,500
9,713,000
Outstanding
206,384,545
171,610,000
71,920,000
168,771,745
132,539,000
54,997,000
449,914,545
356,307,745*
dollar bonds of Brazil occurred in 1931 and 1932. On the
bonds of the Federal Government, 5% Funding Bonds were issued for interest
due from the time of default up to and including October 15, 1934. On the
bonds of the States and Municipalities, with the exception of one issue, no
payments have been offered for the coupons coming due from the time of
default up to and including March 31, 1934.
On February 5, 1934 the Brazilian Government issued Decree No. 23,829
(p. 36-43 Council's 1934 Report) allocating foreign exchange for the partial
service of the Brazilian Federal, State, and Municipal external loans. For
convenience of reference there is reproduced herewith the schedule of payments from that decree.
Defaults on the
*In addition there is outstanding a corporate bond, without
$2,513,500 Paulista Railway Co. "A" 7% due March 15, 1942.
—
Government Guarantee
17
Decree No. 23829 of February 5, 1934
Schedule
Showing percentage of full contractual interest and sinking fund payments, which
will be transferred for payment during the period ending:
31stMarch,
1935
31stMarch,
1936
31st March,
1937
Int. S.F.
31stMarch,
1938
Name of Loan
Int. S. F.
Int. S.F.
Int. S.F.
GRADE I.
100% 100%
100% 100% 100% 100% 100% 100%,
United States of Brazil, 5% FundingLoan 1898.
(Sterling)
UnitedStatesof Brazil, 5% FundingLoan 1914. (Sterling)
(Dollar, Sterling & Paper
***UnitedStates ofBrazil, 5% Funding Loan1931
.
(20 Year Bonds)
Franc)
United StatesofBrazil, 5% FundingLoan1931
(Sterling & Paper Franc),
(40 Year Bonds).
Repayment of Arrearsunderthe Hague Award.
100%, 5% of 100% 5% of 100%> 5% of 100% 5% ol
GRADE 11.
initial
initial
initial
initial
issue
issue
issue
issue
**State of Sao Paulo 7% Coffee RealizationLoan (Dollar & Sterling)
1930.
GRADE 111.
35%
nil
35%
nil
After expiry of 1931
FundingPlan
Brazilian Federal GovernmentSecured Loans.
U. S.of Brazil 5% Loan 1903.
U. S. ofBrazil 5% Loan1909 (Port of
Pernambuco).
*U. S. ofBrazil 8% GoldLoan 1921.
*U. S. of Brazil 7% GoldLoan1922.
*U. S.Brazil6^4% GoldLoan1926.
**U.S. Brazil6V2% Gold Loan 1927.
nil 27^%
27y2 %
GRADE IV.
After expiry of 1931
nil
40%>
nil
(Dollar)
(Dollar)
(Dollar)
(Dollar & Sterling)
30%
nil
Funding Plan
U.S. of Brazil4% Loan1910.
U.S. of Brazil 4% Loan1910 (Lloyd Brasileiro).
U.S.of Brazil4% Loan1910 (GoyazRly.)
U. S. of Brazil 5% Loan1910 (Curralinho
Diamantina Rly.)
U.S.of Brazil 4% Loan1911 (Bahia Rly.)
U. S.of Brazil4% Loan1911.
U. S.of Brazil 4% Loan 1911 (CearaRly.)
U. S.ofBrazil 5% Loan 1913.
*
** Dollar issues
& Sterling.
*** Dollar
Dollar, Sterling Franc.
&
nil
(Sterling)
(Gold Franc)
BrazilianFederal GovernmentUnsecured Loans.
U. S. of Brazil 4^% Loan 1883.
U. S.of Brazil 4y2% Loan1888.
U. S. ofBrazil 4% Loan 1889.
U. S. of Brazil 5% Loan1895.
U. S.of Brazil Rly. Guaranteed4% Rescission
Loan 1901.
U. S. of Brazil 5% Loan 1906 (Goyaz Rly.)
U. S.of Brazil 5% Loan 1908/9 (Itapura
Corumba Rly.)
50%
(Sterling)
(Sterling)
(Sterling)
(Sterling)
(Sterling)
(GoldFranc)
(Paper Franc)
(Sterling)
(Sterling)
(GoldFranc)
(Franc)
(Gold Franc)
(Sterling)
(Sterling)
(Sterling)
40%
nil
18
31st March,
1935
31st March,
31stMarch,
1937
Name of Loan
Int. S.F.
Int. S.F.
GRADE V.
22^% nil
25% nil 27y2% nil
State of Sao Paulo Coffee Institute 7y2% 1926. (Sterling)
1936
Int. S.F.
31st March,
1938
Int. S.F.
37y2%
nil
nil
nil
GRADE VI.
20% nil 22^% nil 25%
35%
( Sterling)
Stateof Sao Paulo 5% 1904.
(Sterling)
Stateof SaoPaulo 5% 1905.
(Sterling)
State of SaoPaulo 5% 1907.
(Dollar, Sterling & Florin)
♥♥♥State
of Sao Paulo 8% 1921.
(Dollar)
♥Stateof SaoPaulo 8% 1925.
(Dollar& Sterling)
♥♥State
of SaoPaulo 7% 1926.
(Dollar & Sterling)
♥♥State
of SaoPaulo 6% 1928.
(Sterling)
Bank of Stateof SaoPaulo 6% Sterling Loan
(Series A. B. C).
(Sterling)
State ofMinas Geraes5% 1913 (Electric Light
& Trams).
(Dollar & Sterling)
♥♥State
of Minas Geraes 6H% 1928.
(Dollar)
♥Stateof MinasGeraes 6^% 1929.
(Dollar)
♥Stateof Rio Grande do Sul 8% 1921.
(Dollar)
♥Stateof RioGrande do Sul 7% 1926.
(Dollar)
♥Stateof RioGrande do Sul 6% 1928.
(Dollar)
♥RioGrande doSul Consolidated Municipal
External Sinking Fund GoldLoan 7% 1927.
GRADE VII.
YlWfo nil
20%
City ofSao Paulo, 6% 1908.
*City of Sao Paulo, 6% 1919.
♥Cityof Sao Paulo,8% 1922.
♥CityofSao Paulo, 6V2% 1927.
City of Santos,7% 1927.
City of Bello Horizonte,6% 1905.
City ofPelotas,5% 1911.
City of Porto Alegre, 5% 1909.
nil 22^%
♥Cityof Porto Alegre, 8% 1921.
♥Cityof Porto Alegre,7y2% 1925.
♥Cityof Porto Alegre,7% 1928.
Federal District of Rio de Janeiro,5% 1904.
Federal District of Rio de Janeiro,Ay2% 1912.
♥Federal
Districtof Rio de Janeiro,8% 1921.
♥Federal
Districtof Rio de Janeiro, 6y2% 1928.
♥FederalDistrict of Rio de Janeiro, 6% 1928.
State ofMaranhao,5% 1910.
♥Stateof Maranhao,7% 1928.
♥♥State
of Parana, 7% 1928.
Stateof Pernambuco,5% 1905.
Stateof Pernambuco,5% 1909.
♥Stateof Pernambuco,7% 1927.
City of Recife,5% 1910.
State of Rio de Janeiro,Sl
/2% 1927.
Stateof Riode Janeiro,7% 1927.
♥Stateof Rio deJaneiro, 6*/2% 1929.
City of Nictheroy, 7% 1928.
State of Santa Catharina, 5% 1909.
♥Stateof Santa Catharina,8% 1922.
*
issues
** Dollar
Dollar & Sterling.
*** Dollar,
Sterling
& Florin.
nil 32^%
( Sterling)
(Dollar)
(Dollar)
(Dollar)
( Sterling)
(Sterling)
(Sterling)
(Sterling)
(Dollar)
(Dollar)
(Dollar)
(Sterling)
(Sterling)
(Dollar)
(Dollar)
(Dollar)
(Paper Franc)
(Dollar)
(Dollar & Sterling)
(Sterling)
(Paper Franc)
(Dollar)
(Sterling)
( Sterling)
( Sterling)
(Dollar)
( Sterling)
( Sterling)
(Dollar)
nil
19
31st March,
1935
31si March,
1936
Int. S.F.
nil
nil
Name of Loan
Int. S.F.
nil
GRADE VIII.
nil
State of Alagoas, 5% 1909.
State of Amazonas,5% 1906.
Stateof Amazonas, (Funding), 5% 1915.
Stateof Amazonas, 6% 1916.
City of Manaos, 5H% 1906.
fState of Bahia, 5% 1888.
fState of Bahia,5% 1904.
fState of Bahia,5% 1910.
fState of Bahia,5% 1913. ,
fStateof Bahia, (Funding) 5% 1915.
fState of Bahia Treasury Bills, 6% 1918.
fState of Bahia Funding, 5%> 1928.
City of Bahia,5% 1905.
Stateof Ceara,5% 1910.
♥Stateof Ceara,8% 1922.
Stateof Espirito Santo, 5%>1906/8.
Stateof Espirito Santo, 5% 1919.
Stateof Para,5% 1901.
Stateof Para,5% 1907.
Stateof Para, (Funding), 5% 1915.
City of Para (Belem), 5% 1905.
City of Para (Belem),5% 1906.
City ofPara (Belem), 5% 1912.
City of Para (Belem) (Funding),5% 1915.
City of Para (Belem) (Treasury Bills), 6%
1918.
Stateof Rio Grande do Norte,5% 1910.
31st March,
1937
Int. S.F.
nil
nil
31st March,
1938
Int. S.F.
nil
nil
(Sterling)
(Sterling)
( Paper Franc)
(Paper Franc)
(Paper Franc)
(Sterling)
(Paper Franc)
(Sterling)
(Paper Franc)
( Sterling)
( Sterling)
(Sterling)
(Sterling)
(Franc)
(Sterling)
(Sterling)
(Paper Franc)
(Dollar)
(Franc)
(Franc)
(Sterling)
(Sterling)
(Sterling)
(Sterling)
(Sterling)
(Sterling)
( Sterling)
(Sterling)
(Paper Franc)
On June 28, 1934 the Brazilian Government issued Decree No. 24,490
providing for the transfer of the loans of the State of Bahia from Grade VIII
to Grade VII of Decree No. 23,829.
Announcement was made by the President of Brazil on November 10, 1937
of the suspension of payments of interest and amortization under Decree No.
-
23,829.
The following paragraph is taken from a letter dated March 8, 1939 from
the Minister of Foreign Affairs of Brazil to the Secretary of State of the
United States, as released by the Department of State on March 9, 1939:
"In connection with all of the phases of economic relationships between
the United States and Brazil, my Government has given renewed thought to
the dollar bond indebtedness of the Government of Brazil and of the Brazilian
States and Municipalities. The decision has been reached, as part of its
general economic program, to resume payment on July 1, 1939 on account of
interestand amortizationon these external dollar debts. A transitionalarrangement for a brief period to effect this has been discussed with the Foreign
Bondholders Protective Council, Incorporated. These discussions in regard
to the scale and amount of payment will be continued after my return to Rio
de Janeiro and subsequent announcement will be made by my Government.
It is the hope and expectation of my Government that with the improvement in its foreign commerce which it now foresees a permanent settlement
* Dollar
issues.
t Transferred to Grade VII Diario Oficial of July 2, 1934. Interest service suspended
Nov. 26, 1935 until Dec. 31, 1936.
20
which will be equitable and satisfactory to all interests involved will follow
upon the expiration of this temporary arrangement."
However, payments were not resumed on July 1, 1939. On August 4, 1939
the following announcement was madeby the Council:
"At the invitation of the BrazilianGovernment through the Department of
State, the Foreign Bondholders Protective Council, Inc. announces that it is
sending its Vice-President, Mr. Dana G. Munro to Rio de Janeiro where he is
expected to arrive about August 13th to undertake negotiations with the
Brazilian officials regarding payment of the service on the Brazilian dollar
bonds.
"On March 9, 1939 the Department of State in Washington issued a press
release in which was quoted a letter from the Brazilian Minister for Foreign
Affairs to the Secretary of State of the United States to the effect that the
Brazilian Government had made a decision to resume payments on July 1,
1939 under a transitional arrangement on account of interest and amortization
on the dollar bonds of the Government of Brazil and of the Brazilian States
and Municipalities, and that subsequent announcement would be made by
the Brazilian Government in regard to the scale and amount of payments.
these payments have not yet been resumed the Brazilian Government announced early last month that one milliondollars hadbeen transferred
by the Brazilian Government to a bank in New York. This sum, however,
has not been offered to the bondholders, but the Brazilian Government has
now invited the Council to send a representative to Rio de Janeiro to undertake discussions there relating to the resumption of service on the dollar
bonds. So soon as there is anything further to report, the Council will advise
all bondholders whose names, addresses and bondholdings are recorded with
it."
During the ensuing conversations, the Government made no proposal for
a resumption of service, and when war broke out in Europe on September Ist,
the Council's representativewas advised that the BrazilianGovernment desired
to suspendnegotiations until the effect of the war on Brazilian economy might
become more apparent. The Council regrets to have to report that there were
no indications during the year that the Brazilian authorities would make a
satisfactory offer on their dollar bonds.
The following statement was issued by the Council September 20, 1939:
"As announced in a statement to bondholders on August 4, 1939, Mr. Dana
G. Munro, Vice-President of the Foreign Bondholders Protective Council,
Inc., went to Rio de Janeiro early in August at the invitation of the Brazilian
Government to discuss with that Government the resumption of service on
Brazilian dollar bonds.
"With the outbreak of war in Europe, however, the Brazilian Government
felt that it could not consider any immediateaction with regard to its foreign
debt. Negotiations were therefore suspended, but with the understanding that
they would be resumed at a later date when the confusion created by the
outbreak of hostilities has somewhat cleared up.
"The Council will continue to follow the situation closely and will continue
to do everything that it properly may to have service resumed on these bonds."
On March 18, 1940 the Council received from the Department of State in
Washington, Brazilian Decree-Law No. 2085 of March 8, 1940 reading, in
translation, as follows:
"Reenacting Decree Law No. 23,829 of
February 5, 1934, for four years
with modifications.
"Article 1. Decree No. 23,829 of February 5, 1934, is hereby reenacted
for the period from April 1, 1940, to March 31, 1944, with the following amendments:
21
"Sole Paragraph. The provisions of this article cover the amendment
contained in Decree 24,490 of June 28, 1934.
"Article 2. The percentages fixed for exchange remittances for service of
the foreign debt of the Union, States and Municipalities shall be the following
percentages of those of the last year of the plan approved by Decree 23,829
of February 5, 1934,
Grades
Ist Year
2nd Year
3rd Year
4th Year
I. Interest
50%
50%
50%
50%
Amort
40%0
40%
40%
40%
11. Interest
50%
50%
50%
50%
Amort
40%
40%
40%
40%
111. Interest
50%
50%
50%
50%
IV. Interest
50%
40%
41%
43%
V. Interest
41%
43%
50%
40%
VI. Interest
50%
40%
41%
43%
VII. Interest
50%
40%
41%
43%
"Article 3. For the purposes of the application of the percentages provided for in the preceding article, the first year to be considered shall be the
period of twelve consecutive months counting from the date of the first
coupons matured but not paid after November 10, 1937.
"Article 4. While the present Decree-Law is in force the general structure of the plan cited in Article 1 shall be maintained and no changes or
modifications of any kind shall be made that benefit in any way the bondholders of a given loan unless proportional benefits are granted to the bondholders of all foreign loans.
"Sole Paragraph. The provisions of this paragraph do not apply to the
object of No. 6 of Article 1 of Decree 23,829 of February 5, 1934.
"Article 5. The sums required for the execution of the present DecreeLaw shall be included in the respective budgets of the Union, the States and
the Municipalities.
"Article 6. The plan covered by this Decree-Law shall be reviewed again
October 1943.
"Article 7. No. 5 of Article 1 and Articles 2 and 3 of Decree-Law No.
23,829 of February 5, 1934, and other provisions to the contrary are hereby
revoked."
On the subject of repatriation of Brazilian bonds beyond the provisions of
Decree No. 2085 of March 8, 1940, the Brazilian Minister of Foreign Affairs
in a communication of that date to the American Ambassador in Rio stated:
"I have the honor to inform Your Excellency that the Brazilian Government has no worked-out plans for now or the near future for the repatriation of bonds in excess of the amortization indicated in this proposal. The
Brazilian Government hopes that, in due time, improving trade and exchange
conditions may permit it to avail itself of the provisions of Article I (6) of
the Aranha Plan Decree which permit such additional repurchases in the open
market. Under no conditions, however, does the BrazilianGovernment intend
to make more than moderate purchases of this character."
Further on this same subject the Brazilian Minister of Foreign Affairs
wrote on March 25, 1940 to the American Ambassador in Rio as follows:
"In reply to your letter of the nineteenth of this month Ihave the honor
to inform your Excellency that the Brazilian Government will inform the
bondholders whenever it avails itself of the provisions of Article I (6) of
decree No. 23,829 of February 5, 1934, which authorizes it to acquire bonds in
the market."
22
The following statement was issued by the Council on April 10, 1940:
"Foreign Bondholders Protective Council Inc. has been advised through
the courtesy of the Department of State in Washington that the President of
Brazil signed on March 8, 1940 Decree No. 2085 extending, with certain
modifications, Decree No. 23,829 of Feb. 5, 1934, for four years from April 1,
1940 to March 31, 1944. The payments, which are to commence with the first
unpaid coupons coming due after Nov. 10, 1937, are not partial payments on
account of the face amounts of the coupons but are offered as the sole payment on the surrender and cancellation of the coupons accepting the payment
under the Decree.
"The Decree would seem to provide for the payment of the following
amounts on the dollar bonds:
GRADE I
Brazil
Funding Bonds
5% 1951
Offered per $25.00 coupon
(a)
Ist Year
2nd Year
3rd Year
50%
50%
50%
$12.50
$12.50
$12.50
4th Year
50%
$12.50
GRADE II
State of San Paulo 7% 1940
50%
(b)
$17.50
50%
$17.50
50%
$17.50
50%
$17.50
GRADE 111
U. S. of Brazil 6^% Oct. 1, 1957
6V2% Oct. 15, 1957
7% June 1, 1952
8% June 1, 1941
$35.00 coupon
$40.00 coupon
GRADE VI
Minas Geraes
l
6l6 /
2 % 1958
6]/2 % 1959
Rio Grande do Sul 8% 1946
7% 1966
7% 1967
San Paulo (State)
Offered
per
6% 1968
8% 1936
8% 1950
7% 1956
1968
6%
coupon
$30.00
$32.50 coupon
$35.00 coupon
$40.00 coupon
GRADE VII
7% 1958
Maranhao
Parana
7% 1958
Pernambuco (State)
7% 1947
Rio de Janeiro
6J4% 1959
Santa Catharina 8% 1947
Porto Alegre 7y8% 1961
2 % 1966
7% 1968
Rio de Janeiro (City)
8% 1946
6yi% 1953
6% 1933
San Paulo (City) 6% 1943
8% 1952
6%% 1957
Offered per $30.00
$32.50
$35.00
$37.50
$40.00
(a) Apr. 1, 1938
1, 1938
(b) Oct.
(c) Apr. 15, 1938
coupon
coupon
coupon
coupon
coupon
(a)")
(c) I
(d) f
(d)J
(c)
(c)
(a)
(f)
(g) 1
(g) f
(h) ■
(h)
(c)
(h)
J
(f)
(i)
(*)
(h)
(j)
(g)
(h) I
(j)
(a)
(j)
(a)
(f)
(f)
(k)
f
„
25
%
$ 8.12J^
8.75
10.00
25%
25%
25%
$ 8.12J4
$ 8.1254
8.75
10.00
$ 8.1254
8.75
10.00
8.75
10.00
14%
14.35%
15.05%
17.5%
$4.20
4.55
4.90
$4.3054
$4.51J4
$5.25
5.60
4.66?4
5.02%
5.74
13%
13.325%
13.975%
16.25%
$3.90
$3.99%
4.33 A
$4.19^4
$4.8754
4.2254
4.55
4.8754
5.20
4.89^
5.26&
6.02
5.68%
6.1254
7.00
4.66^
4.89J/6
5.2853
5.68%
5.33
5.59
6.50
4.99 il
First Coupons to be paid under Decree:
1, 1937
(d) June 1, 1938
(g) Dec.
1, 1938
(h) Jan.
(c) Mar. 1, 1938
1, 1938
(f) May
(i) Mar. 15, 1938
4.54,3636
5.24 A 6.09%
1, 1938
(j) Feb.
(k) Nov. 15, 1937
(*) Not yet known
23
"The Decree also provides during each of the four years of the plan for
40% of the contract amortization on the bonds in Grade Iand 20% for bonds
in Grade 11. The Council is advised by the Department of State that the
Brazilian Finance Minister has stated that, while the Brazilian Government
has worked out no plans for the immediate repatriation of additional bonds,
the Brazilian Government hopes that improving trade and exchange conditions
may permit additional purchases in the open market. The Minister added that
under no conditions, however, does the Brazilian Government intend to make
more than moderate purchases of this character. The Council has been
advised that the Brazilian authorities appear to have in mind the repatriation
within the next four years of roughly ten milliondollars of Brazilian federal
bonds.
"Without passing in any way on the merits of the Brazilianproposal, which
it, the Council limits its comment on the proposal of
the Brazilian Government received through the Department of State to the
remark that pursuant to consultation with the Department of State negotiations at present would seem to hold no favorable prospect of obtaining any
better offer. The Council must leave to bondholders to determine whether or
not they will accept what is now offered."
was not negotiated by
rold Francs
'aper
Francs
lorins
229,185,500
627,529,752
7,184,000
BULGARIA
Kingdom of Bulgaria
Kingdom of Bulgaria
DollarBonds
Issued Outstanding
1927
1967
4,500,000
3,786,000
7%
7y2%
13,000,000
12,848,500
1928
1968
17,500,000
—
16,634,500
—
Interest and sinking fund on these issues tranches of League Loans
defaulted in 1932 and 1933. Approximately 60% of the outstanding bonds are
held by Banque Nationale de Bulgarie.
Partial payments on the dollar bonds have been offered since the time of
default. On May 2, 1939 the Fiscal Agent of the 7y2% StabilizationLoan of
1928 published a notice that, as the Trustees of the Loan had received sufficient foreign exchange to pay 36%% of the coupon due May 15, 1939, they
were prepared to pay holders after due date $13.69 for each $37.50 coupon
upon surrender thereof with appropriate letter of transmittal. On October
25, 1939 the Trustees, having received sufficient exchange to pay 40% of the
coupon due November 15, 1939, the Fiscal Agent announced that after that
date $15 for each $37.50 coupon would be paid under similar conditions.
The Fiscal Agent for the 7% Settlement Loan of 1926 published similar
notices on June 12, 1939 regarding the payment of the coupon due July 1,
1939 at 36^%, or $12.78 for each $35 coupon, and on December 12, 1939
regarding payment of the coupon due January 1, 1940 at 40%, or $14 for each
$35 coupon.
While the League Loans Committee and the British and French bondholders associations on February 22, 1940 recommended acceptance of a pro-
24
posal by the Bulgarian Government to pay in foreign exchange 40% on
account of interest due May 15 and November 15, 1940 on the 7y2% Loan,
and July 1, 1940 and January 1, 1941 on the 7% Loan, only %ds of the 40%,
or $9 was offered as a payment on account of the July 1, 1940 coupon on the
7% Loan.
Other External Obligations Outstanding
10,541,188
215,897,000
173,437,000
£
Gold Francs
Paper Francs
CANADA
Dollar Bonds
(Payable in New York, or in New York and Canada)
National
Dominion of Canada
Dominion of Canada
Dominion of Canada
Dominion of Canada
Dominion of Canada
Dominion of Canada
Dominion of Canada
Dominion of Canada
Issued
1930
1935
1936
1937
1937
1938
1939
otmnwn 'uaranteei
Canadian National Ry.1 .
Canadian National Ry.2
Canadian National Ry.2 2
Canadian Ntl. (W.1.) S.S.
Canadian Northern Ry.3
Grand Trunk Pacific Ry.2
Grand Trunk Pacific
Matures
1952
1960
1945
1961
1944
1967
1968
1922
. . 1927
...
1929
...
1929
...
...
1930
...
... 1931
.... 1930
1921
1905
Ry. .
2
1930
1931
1914
Harbor Comm.of Montreal2 1929
New Westminster Harbor1 1928
St. John Harbor Comm.4.
.
Outstanding
Interest Issued
5%
4%
2y2%
Z%%
2%%
3%
3%
V/4%
1941
July 1,1957
July 1,1969
100,000,000 100,000,000
100,000,000 100,000,000
76,000,000 76,000,000
48,000,000 48,000,000
30,000,000 30,000,000
55,000,000 55,000,000
40,000,000 40,000,000
20.000,000 20,000,000
$469,000,000 469,000,000
Ay2%
5%
Oct. 1,1969
5%
Feb. 1,1970
5%
June 15, 1955 43^%
Feb. 1,1956 4^%
Sept. 1, 1951 4^%
Mar. 1, 1955
5%
July 1,1946 6y2%
Jan. 1,1962
3%
Jan. 1,1962
4%
Nov. 1, 1969
5%
Apr. 1,1948 4^%
1940-1954 Zy2-6y2%
65,000,000
60,000,000
60,000,000
18,000,000
50,000,000
70,000,000
50,000,000
10,000,000
25,000,000
34,992,000
15,960,000
19,000,000
700,000
892,642
$479,544,642
65,000,000
60,000,000
60,000,000
18,000,000
50,000,000
70,000,000
50,000,000
9,400,000
24,238,000
34,992,000
8,440.848
19,000,000
700,000
795,385
470,566,233
Summary
(Canadian Dollar Bonds Payable in the United States and Canada)
—
Dominion Direct Obligations
Canadian Dollar Bonds offered in U. S
Guaranteed Obligations
Dominion Total
1 Payable in
Issued
Outstanding
469,000,000
479,544,642
469,000,000
470,566,233
939,566,233
$948,544,642
N. Y. in Dollars and in Canada in Canadian Dollars.
2 Payable in N. Y. in Dollars, in
Canada in Canadian Dollars and in London in £
3 Payable in N. Y. in Dollars.
* $219,000 payable in Canada,
London or N. V., balance in Canada only.
25
—
Provincial Direct Obligations
Alberta1
British Columbia
Issued
Manitoba
New Brunswick
Nova Scotia
Ontario
Quebec
Saskatchewan
—
Provincial Guaranteed Obligations
Alberta
British Columbia
Manitoba
New Brunswick
Ontario
Quebec
Saskatchewan
—
Provincial Total
Municipal Direct Obligations
Calgary (Alberta)1
Edmonton (Alberta)1
Edmonton Public School District No. 7171
Halifax (Nova Scotia)
Hamilton (Ontario)
Montreal (Quebec)2
New Westminster (British Columbia)
Ottawa (Ontario)
Prince Rupert (British Columbia)
Quebec (Quebec)
Regina (Saskatchewan)
St. Boniface (Manitoba)3
Saskatoon (Saskatchewan)4
Sault Ste. Marie (Ontario)
Sherbrooke (Quebec)
Three Rivers (Quebec)
Toronto (Ontario)
Vancouver (British Columbia)5
Victoria (British Columbia)
Westmount (Quebec)
Weyburn (Saskatchewan)6
Winnipeg (Manitoba)
—
Municipal Guaranteed Obligations
Montreal (Quebec)
Toronto (Ontario)
Vancouver (British Columbia)
Winnipeg (Manitoba)
Municipal
* Outstanding
Total
Outstanding
79,944,000
70,875,800
45,436,000
40,702,000
40,574,000
332,498,600
64,000,000
52,729,500
726,759,900
79,944,000
66,677,800
44,167,000
38,642,000
40,574,000
280,276,300
64,000,000
52,729,500
667,010,600
14,494,950
3,000,000
400,000
297,000
29,079,000
1,800,000
135,800
49,206,750
13,026,964
3,000,000
400,000
297,000
24,040,000
1,800,000
135,800
42,699,764
709,710,364
$775,966,650
5,429,247
11,751,836*
1,619,000*
5,208,000*
505,000
95,927,207*
856,326*
14,671,055
1,735,594
6,857,000
3,090,572
400,000
2,369,316*
807,345*
475,000
1,050,000*
95,512,340
15,385,395
1,893,609*
1,041,667*
395,096
22,122,781
289,093,396
19,564,000
2,000
5,500,000*
9,054,000
34.120,000
$323,213,396
4,077,500
11,741,836
1,619,000
5,208,000
205,000
95,927,207
856,326
9,489,279
1,423,194
6,689,000
1,359,596
285,000
2,369,316
807,345
475,000
1,050,000
56,554,185
10,969,654
1,893,609
1,041,667
212,260
10,286,490
224,540,464
16,594,000
2,000
5,500,000
9,054,000
31,150,000
255,690,464
amounts used as amounts issued were not given in City Reports.
1Defaults adjusted in 1938.
2 Maturity defaults in Montreal early in
1940.
s In default on interest since 1932 and on principal since 1936.
4 ln addition there
are 5% loans of 1931 due 1943 totaling $918,146 payable in N. V, on
payment, however, is made in Canadian funds only.
which
5 Includes
South Vancouver and Point Grey.
c Defaulted Nov. 1, 1937. No payments since.
26
Recapitulation
Issued
Outstanding
Direct (8 issues)
Guaranteed (14 issues)
469,000,000
479,544,642
469,000,000
470,566,233
'rovincial :
Direct (131 issues)
726,759,900
49,206,750
667,010,600
42,699,764
lunicipal :
Direct (528 issues)
289,093,396
34,120,000
224,540,464
31,150,000
1,904,967,061
>ominion:
$2,047,724,688
Total
On the Dominion dollar bonds, full service has been paid
On the Provincial bonds, payments have been made with the exception of
Alberta and those issues guaranteed by the Province. Under the "Provincial
Securities Act" interest coming due on Alberta bonds since June 1, 1936 was
offered at one half the coupon rates. This Act, however, was declared by the
Supreme Court of Alberta ultra vires of the Alberta Legislature.
As to the Municipal bonds, the defaults in Calgary and Edmonton were
adjusted in 1938 when holders wereoffered interest payments at the old coupon
rates to the original maturity dates, thereafter at 4^% to the extended date
of 1962 on the bonds of Calgary, and 1967 on the bonds of Edmonton. It is
understood that Montreal defaulted on two maturities early in 1940, one of
which, however, was a banking credit. Holders of St. Boniface bonds were
offered interest from default through 1936 at 200 on the dollar; 1937 interest
at 35^ on the dollar; and 1938 and 1939 interest at 300 on the dollar. St. Boniface bonds in the principal amount of $285,000 have been in default as to
principal since 1936. No payments have been made on the bonds of Weyburn
since their default in November, 1937. Payments, however, are being made
on the Municipal bonds of Halifax, Hamilton, New Westminster, Ottawa,
Prince Rupert, Quebec, Regina, Saskatoon, Sault Ste. Marie, Sherbrooke,
Three Rivers, Toronto, Vancouver, Victoria, Westmount, and Winnipeg.
83,467,198
£
CHILE
.
Dollar Bonds
Outstanding
i
Ma-
National
Republicof Chile
Republic of Chile
Republic of Chile
Republic of Chile
Republic of Chile
Republic of Chile
Republic of Chile
Municipal
Un- Bonds Stamped
In-
Issued tures terest Issued
1922 1942
1926 1960
1927 1961
1928 1961
1928 1961
1929 1962
1930 1963
Chilean
Consolidated
Municipal Loan 1929 1960
City of Santiago 1928 1949
City of Santiago 1930 1961
stamped Assenting to
Bonds
Law 5580
Total
3,471,000
9,550,500
5,477,500
6,739,500
3,228,500
2,147,000
3,726,500
8,491,000
18,709,000
12,019,000
16,771,500
6,732,500
4,574,000
12,880,500
11,962,000
28,259,500
17,496,500
23,511,000
9,961,000
6,721,000
16,607,000
7% 15,000,000 6,277,500
7% 4,000,000 1,235,500
7% 2,200,000 632,500
3,677,500
816,500
792,000
9,955,000
2,052,000
1,424,500
7%
6%
6%
6%
6%
6%
6%
18,000,000
42,500,000
27,500,000
45,912,000
16,000,000
10,000,000
25,000,000
27
ANNUAL REPORT FOR NINETEEN THRTY-NINE
-Outstanding
Un- Bonds Stamped
>
i
Corporate
In(Government
MaGuarantee) Issued tures terest Issued
Mortgage Bank
of Chile
1925 1957 6y2% ;0,000,000
Mortgage Bank
of Chile
1926 1961 6^% ;0,000,000
Mortgage Bank
of Chile
1926 1931
of Chile
1928 1961
Mortgage Bank
Mortgage Bank
of Chile
Not Publicly
offered.
Water Co.
Valparaiso
1929 1962
... 1915
Municipal
antee)
Guar-
Bonds
Law5580
Total
3,057,000
8,404,000 11,461,000
2,495,000
4,587,500
7,082,500
6% 0,000,000 1,573,000 3,905,000 5,478,000
6% 10,000,000 3,194,000 7,932,500 11,126,500
6% 10,000,000 3,090,500 10,090,000 13,180,500
1939
6%
480,000
Unstamped
National
stamped Assenting to
36,000
110,000
Outstanding
Stamped
Bonds
146,000
.
Issued
Bonds
184,912,000
21,200,000
31,340,500
5,145,500
80,177,500
5,286,000
154,833,000*
8,145,500
90,480,000
13,445,500
35,029,000
13,445,500
296,592,000
5,931,500
120,492,500
176,424,000t
Total
Interest and sinking fund on all >f these issues went into default between
August 1931 and March 1932. Whil: the bonds continue in complete default,
holders were offered under the plan of Law No. 5580 and subsequent decrees
%39.58y2 for four years interest per 51,000 bond, available on the Government
and Government guaranteed issues mtil January 12, 1940, and on the Municipal issues until August 10, 1940. On January 15, 1940 holders were offered,
also under Law No. 5580 and subiequent decrees, $15.22^2 for one year's
interest per $1,000 bond.
The first four offers of payments made under Chilean Law No. 5580 with
respect to the Republic of Chile, the Mortgage Bank of Chile, and the Water
Company of Valparaiso bonds, expbed on January 12, 1940 and consequently
only bondholders who assented oi or before that date could receive the
(interest payments under the plan aggregating $39.58>2 per $1,000 bond
declared in 1936, 1937, 1938 and 1935
The Council was advised by the Agent for the Autonomous Institute of
Chile that approximately 81% of theoutstanding dollar bonds of the Republic,
the Mortgage Bank, and the Water Zompany of Valparaiso had been stamped
before that date as accepting the terns of Chilean Law 5580. Chilean regulations permit the utilization of the aims which were not applied for interest
payments to that date for additionalpurchases of bonds on the market.
*
Includes Republic Bonds, stamped andunstamped, also Municipal and Corporate stamped
bonds which, by reason of stamping, have Chiban Government as obligor.
tln addition there are outstanding th following dollar bonds of corporations, without
Government Guarantee:
317,500
Anglo-Chilean Consol. Nitrate Corp
7% Nov. 1,1945
Anglo-Chilean Nitrate Corp
454-5% Jan. 1, 1967 10,257,000
1,1954
813,000
July
Lautaro Nitrate Ltd
6%
Lautaro Nitrate Co. Ltd
4% Dec. 31, 1975 25,091,000
$36,478,500
28
The 1939 receipts to the Autonomous Institute for external debt service
under Law 5580 totaled $9,560,203, half of which were allocated for interest
and half, less expenses, for retirementof bonds.
On January 15, 1940 the Autonomous Institute announced that holders of
Chilean bonds would be offered after February 1, 1940 $15.22^4 upon surrender of two additional coupons, this sum representing one year's interest
per $1,000 bond. Although under Decree 37 of January 4, 1936 the offers of
interest were to have remained open to non-assented bonds for twelve
months from the dates on which payments were offered, after interest offered
in any one year first reached 2%, the Chilean authorities have, by Decree 113
of January 6, 1940, changed that provision, the sums now being held only
during the calendar year in which the payment is offered, after which time
interest funds go to increase the amortization fund.
Holders of bonds who have not assented to the plan and who wish to
accept the current payment of $15.22^4 which is available to December 31, 1940
upon surrender of two coupons per $1,000 bond, are required to surrender,
without any payment therefor, the eight previous coupons, and to assent to
the plan of Law 5580 by having their bonds stamped accordingly.
As regards assented bonds, the Council is advised that the Chilean Amortization Institute has made the following arrangement with its Agent in the
United States:
"Any sums at any time held by you for the purpose of paying coupons on
Bonds which have assented to the plan of service of Law 5580 shall be held
in trust for the holders of coupons appurtenant to such Bonds until five years
after the respective payment dates as announced by the Institute, at which
time such sums shall be returned to the Institute and such coupons shall
thereafter be payable at the office of the Institute in Santiago, Chile."
The following table shows the principal amount of bonds purchased under
the Plan of Law 5580 and outside that Law during a five year period. It is
to be noted that only about one-fifth of the amount set aside in 1939 for amortizationsunder the Law were used for that purpose during that year.
Amortizations Under Plan of Law 5580
Approximate
Amounts
Availablefor
Amortisations
$ 2,064,126
Year
1935
1936
1937
2,459,787
3,053,000
7,067,787
4,728,102*
1938
1939*
$19,372,802
PrincipalAmount of BondsPurchased
$14,674,500
14,020
£
Sw.Fr
15,839,000
13,198,500
33,786,500
5,882,000
$83,380,500
71,660
381,820
1,254,863
120,560
£1,842,923
839,300
1,727,000
6,577,700
228,000
Sw. Fr. 9,372,000
Extraordinary AmortizationsOutsideLam 5580
Amounts
Availablefor
Amortizations
1935
1936
1937
Law 5580
not known
1939
outside
* Appoximately
1938
$ 461,000
9,500
4,315,500
2,000
$4,788,000
4/sths not used in 1939.
£
....
3,768
$3,768
Sw. Fr. 1,010,000
140,000
29,000
282,000
800,000
Sw. Fr. 2,261,000
29
The Autonomous Institute, Santiago, Chile, made a statement on December 29, 1939 reading, in translation, as follows:
"The Autonomous Public Debt Amortization Institute, in accordance with
the provisions of Article 6 of the Regulations of Law No. 5580 of January
31, 1935, approved by Supreme Decree No. 3837 of October 24, 1938, states:
That it has received during 1939 the following income to be applied to the
service of the Foreign Debt:
Profits of the Chilean Nitrate and lodine Sales Corporation
U5.52,979,512.14
category and additional taxes on the
6,348,008.74
copper companies
Quota of the taxes on petroleum imported for the nitrate industry
65,810.14
(Article 7 of Law No. 6155 of January 6, 1938)
copper comQuota of the taxes on petroleum imported for the1938)
62,872.14
panies (Article 7 of Law No. 6155 of January 6,
Income tax of the fourth
U5.59,456,203.16
"Fifty percent of this income, i.e. the sum of U5.54,728,101.58 shall be
applied to the payment of interest at the rate of U5.51,5225 per hundred dollars
of nominal capital, Fr. Ss. 1,5225 per hundred Swiss Francs of nominal capital,
and £1-10-5,4 per hundred pounds of nominal capital.
"From the 50 per cent remaining of the revenues receivedbonds have been
redeemed to the value of U5.55,882,000 nominal, £120,560 nominal and Fr.Ss.
228,000 nominal; which are withdrawn from circulation. The unused balance
of this 50 per cent goes to increase the fund for redemption or amortization
during the coming year.
"Deducting these amortizations, the balances of bonds of the external debt
are as follows:
27,763,571
176,424,000
109,794,000
£
US.$
Fr.Ss
"The last of said balances has in addition been reduced by Fr. Ss. 800,000.
This reduction is due to the extraordinary amortization of Swiss Franc bonds
undertaken by the Municipality of Santiago during 1939.
"Once this amount is deducted from the above figures, the actual balances
of bonds of the external debt in circulation are as follows:
27,763,571
176,424,000
108,994,000"
£
US.$
Fr.Ss
OtherExternal Obligations Outstanding
27,763,571
108,994,000
£
Swiss Francs
CHINA
Dollar Bonds
Treasury Notes
Treasury Notes
Non-Interest Scrip
....
Issued Matures
1919
1954
1937
1937
1954
1954
Interest
6% (now 5%)
2-4%
Issued Outstanding
5.500,000
5,500,000
4,900,000
1,022,085
4,900,000
1,022,085
11,422,085
11,422,085
30
Under the Readjustment Plan of April 12, 1937 interest was paid in 1937
and 1938 on the Treasury Notes and the Pacific Development Loan.
A £1,500,000 tranche of the £6,000,000 Hukuang Railways Loan was
offered in the United States in 1911. Under the Readjustment Plan of April
5, 1937 the cash interest payments provided for were paid in 1937 and 1938
but the non-interest bearing scrip provided for under that plan has not been
issued.
During the course of the year the Government of China found it necessary
to suspend the service on its foreign bonds on account of the exchange shortage caused by the occupation of large portions of Chinese territory. In the
latter part of the year the Council was advised with respect to the customs
and salt secured loans that ".
the Chinese Government greatly regrets
that, owing to Japanese interference with the pledged revenues and with
the currency in China, it has been forced temporarily to discontinue full
provision for the service of these issues, and is setting aside in the Central
Bank of China a share of the long-term debt service."
No interest payments weremade in 1939 on the Treasury Notes, the Pacific
Development Loan, and the Hukuang Loan.
..
69,972,686
149,001,560
137,743,000
£
French Francs
Belgian Francs
Guilders
Yen
'.'.'.'.'.'.'.'.'. '. '. '. '. '. '. '. '.'.'.'.'.'.'.'.'.'. 31,483!000
139,078,400
100,000,000
Customs Gold Units
U. S. Dollars
112,878,248$
COLOMBIA
Dollar Bonds
Issued Matures Interest Issued
1927
1961
6% 25,000,000
1928
1961 6% 35,000,000
National
Republic of Colombia
Republic of Colombia
Republic of Colombia (1934
Funding Certificates)
Outstanding
21,205,000*
30,018,500**
1934
1946
4%
3,743,145
2,241,305
Departmental
Antioquia (Series A B C D)
1925
Antioquia (First, Second, Third
1927
series)
1945
20,000,000
17,172,000
1928
1946
1948
1928
1959
1927
1947
7%
7%
7%%
7y2%
7%
6^%
7%
7%
12,350,000
10,000,000
4,000,000
4,500,000
12,000,000
2,000,000
2,500,000
11,507,000
8,595,500
3,408,500
3,865,000
11,537,000
1,791,000
2,112,000
500,000
6,000,000
2,700,000
2,885,000
3,000,000
9,000,000
1,780,400
4,682,000
2,257,500
2,408,000
2,644,000
8,378,000
...
Caldas
Cauca Valley
Cauca Valley
Cundinamarca
Santander
Tolima
1926
1926
1928
1957
1946
1948
Municipal
Barranquilla (Series ABCDE) 1925 1935-49 8%
1924
Bogota
1945
8%
Bogota
1927
1947 6y2%
Cali
Medellin
Medellin
1927
1926
1928
1947
7%
1951 7%
1954 6y2%
see p. 263 Council's 1938 Report.
*t For details
this amount $2,292,000 held by Colombian National Treasury.
** Of
Of this amount $3,705,500 held by Colombian National Treasury.
31
Issued Matures Interest Issued Outstanding
guarantee)
gricultural Mortgage Bank... 1926
1,796,000
1946
7% 3,000,000
1947
7% 3,000,000 2,217,500
1947
6% 5,000,000 2,997,000
.gricultural Mortgage Bank... 1928
1948
6% 5,000,000 3,278,000
Outstanding
Issued
63,743,145
Departmental
67,350,000
26,085,000
Municipal
Corporate (Government guarantee) 16,000,000
53,464,805***
59,988,000
22,149,900
10,288,500
National
173,178,145
145,891,205f
Interest and sinking fund on all these issues, except the scrip due in
1946, went into default between October 1931 and October 1933. Past due
interest to December 31, 1939 totals approximately $62,358,909, making a grand
total owed by Colombia of $208,250,114.
Negotiations were held with Colombian officials during the course of
1939. In view of the prosperous condition of Colombian trade and public
finances the Council hoped that a satisfactory arrangement for the resumption
of debt service might be possible, but no proposals were made during the
year which seemed to offer the basis for a settlement which the Council
could recommend to the bondholders.
On February 19, 1940 Colombia made an offer to pay 50% of the interest
due during 1940 on its two 6% Republic issues of 1961 and to provide $400,000
for purchasing bonds during that year on the open market. The Council's
statement with regard to that offer follows:
"The Government of Colombia has today offered the holders of Republic
of Colombia 6% External Sinking Fund Gold Bonds due January 1, 1961
and October 1, 1961, to pay for the temporary period of the one year 1940,
interest due at 50% of the contractual rate, that is to say 3%, and to set aside
the sum of $400,000 for the purchase in 1940 of bonds on the market. Coupons
maturing on January 1, 1940 will be paid immediately at the above rate, and
subsequent coupons maturing in 1940 will be paid at the same rate on and
after their respective maturity dates, upon presentation and surrender thereof,
accompanied by appropriate letters of transmittal, to Hallgarten & Co., 44
Pine Street, New York, N. V., or Kidder, Peabody & Co., 17 Wall Street,
New York, N. V., as agents for the Republic of Colombia in this matter.
"Under the agreement with the Paying Agents the Republic of Colombia
proposes that it will promptly present for cancellation and retirement
$5,997,500 principal amount of these bonds held by the Republic. This will
leave outstanding $45,226,000 principal amount of bonds.
"Under the terms of the agreement with the Paying Agents the funds for
the payment of the coupons falling due in 1940 will remain on deposit with
the Agents of the Republic for five years after the payment date of the 1940
coupons for which such sums are held. Thereafter these funds may be returned
*** Of this amount $5,997,500 held by
t In addition there are
Government Guarantee:
Bank of Colombia
Bank of Colombia
Mortgage
Mortgage
Mortgage
Mortgage
Mortgage
Bank of Bogota
Bank of Bogota
Bank of Colombia
Bank of Colombia
Bank of Colombia
outstanding
Colombian National Treasury.
the following dollar bonds of
7%
7%
7%
7%
654 %
7%
7%
corporations,
Apr. 1,1947
Apr. 1, 1948
May 1,1947
Oct. 1,1947
Oct. 1,1947
Nov. 1, 1946
Feb. 1,1947
without
986,500
811,500
1,912,000
1,957,000
1,985,000
3,213,000
1,551,000
$12,416,000
32
to the Republic at its request and bondholders must then apply for payment to the Colombian Government in Bogota.
"The Council would point out that this offer is for one year only during
which time the Council will continue negotiations in the hope that they may
result in an offer of a permanent settlement which the Council may be able
to recommend to the bondholders as fair and equitable. The Council feels
that the present resumption of payment on a temporary basis is a step in
the right direction and the bondholders may consider it to their interest to
take the amount offered for this year.
"Those desiring to take the amount now offered should apply to the Paying
Agents, Hallgarten & Co., 44 Pine Street, New York, N. V., or Kidder,
Peabody & Co., 17 Wall Street, New York, N. V., where the required letters
of transmittal are also obtainable.
"The Council fully shares the great disappointment of the holdersof Colombian bonds, Departmental, Municipal and bank, that their rights and necessities have not yet been given the consideration which they require and deserve.
The Council will do everything it properly may to induce the appropriate
Colombian authorities at long last to make fair and just offers to the bondholders and it will hope that the Departmental, Municipal and bank bonds
will be included at the time of future offers."
2,666,290
£
COSTA RICA
Dollar Bonds
8,000,000
1926
1951
7%
Outstanding
1,800,000
1,597,956
474,900
1,217,000
1,145,520
354,000
11,872,856
8,112,520
Republic of Costa Rica
Republic of Costa Rica
(Pacific Railway)
1927
Costa Rica Funding
1932
Pacific Railway Funding... 1933
1949
1951
1949
7y2 %
5%
5%
5,396,000
There are $2,370,351 additional bonds of the aboveissues held by the Costa
Rican Government, which that Government, in its offer of March 20, 1939
(p. 332-4 Council's 1938 Report), agreed to cancel, but which had not yet
been cancelled up to December 31, 1939.
The dollar bonds went into default in 1932 and 1933. On the 7% loan,
holders were offered $23 in cash and $222 in 5% funding bonds for 3y2 years'
interest to and including November 1, 1935, and a cash payment of 50% of
the face amount of the May 1, 1936 coupon. On the 7^2% Pacific Railway
loan, holders were offered $300 in 5% funding bonds for 4 years' interest to
and including March 1, 1937.
On March 20, 1939 the Costa Rican Government made a unilateral temporary 3 year offer (p. 332-4 Council's 1938 Report) to the holders of its dollar
bonds providing for the purchase of interest coupons falling due during the
next 3 years at 30% of their face amount, and the back interest coupons on
the basis of 1% computed on the face amount of the bonds.
Payments Offered
For Coupons
For Coupons
under1939 Plan
of
of
per Coupon of
1936-1937-1938
1939-1940-1941
$35.00
$5.00
$10.50
37.50
5.00
11.25
5.55
1.11
1.67
7.50
1.50
2.25
33
1,506,916
5,811,000
£
Francs
CUBA
Dollar Bonds
Republic of Cuba
Republic of Cuba
Republic of Cuba
Republic of Cuba
Republic of Cuba (Public
Works)
Republic of Cuba
(Sugar Stabilization)*
Republic of Cuba
Outstanding
1904
5,093,000
1944
5% 35,000,000
1909
1949
1923
1953
1930
1945
1930
1937
1940
1977
1914
....
1949
4H%
5%
5^%
5^%
5/2 %
4^%
16,500,000
10,000,000
50,000,000
7,779,000
3,151,100
18,567,800
[40,000,000]
2,224,000
42,000,000
85,000,000
1,176,700
80,753,100
238,500,000
118,744,700
On the first four issues sinking fund defaults occurred in 1934, and while
sinking fund payments were resumed the following year they continue one
year in arrears.
Interest on all issues, with the exception of the Public Works Bonds, has
been paid in full.
The offer on June 10, 1938 to holders of Public Works bonds, made under
a prospectus dated June 22, 1938, (p. 481 Council's 1938 Report) to exchange
their 5y% bonds due 1945 for new 4J4>% bonds due 1977 was open for acceptance until July 10, 1939. While 94% of the $40,000,000 Public Works bonds
had been exchanged to the end of 1939, the Cuban authorities have not reopened the offer so that the remaining holders wishing to exchange their bonds
here might do so.
By Decree No. 1608 of August 16, 1938 the Cuban Government suspended
the collection of the Highway Taxes, 90% of which were pledged to the
service of the new 4J4>% bonds due 1977. The Council was advised through
the courtesy of the Department of State on March 1, 1940 that no new taxes
had been substituted for those which were abolished nor was it expected that
any new taxes for such a purpose were contemplated at that time
CZECHOSLOVAKIA
Dollar Bonds
National
14,000,000 2,244,100
Czechoslovakia Republic "A"... 1922
1951 8%
9,250,000 1,438,700
Czechoslovakia Republic "8"... 1922
1954
8%
Municipal
City of Greater Prague
1922
National
Municipal
in brackets
* Figure
Not publicly
not included
in totals.
1952 7y2%
Issued
Outstanding
23,250,000
7,500,000
3,682,800
606,000**
30,750,000
4,288,800
offered.
**Additional $4,022,000 reported as held in Czechoslovakia.
7,500,000
606,000**
34
Interest and sinking fund payments were made in full on all these issues
until the occupation of Czechoslovakia by Germany. On April 1, 1940 interest
was defaulted on the "A" and "B" bonds of the Republic, while sinking fund
defaults occurred on October 1, 1939. On the bonds of Prague both interest
and sinking fund was defaulted November 1, 1939.
The Fiscal Agents for both Series of the Czechoslovak Dollar Loan of
1922 published the following notice on September 28, 1939:
"Coupons due October 1, 1939, on the above bonds will be paid in lawful
money of the United States on and after that date at the offices in the City
of New York of the undersigned. These coupons will be paid out of funds
received from the Government of the Czechoslovak State prior to February
15, 1939.
"The current Sinking Fund has not operated."
On March 27, 1940 they published the following further notice:
"Pending further advices, payment by the undersigned of the April 1,
1940 and subsequent interest coupons on the Bonds of the above issues will
not be made nor will the Sinking Funds operate.
"There remains a balance of approximately $380,000 of funds received prior
to February 15, 1939 from the Government of the Czechoslovak State. No
application of these funds is being made at the present time because of existing
uncertainties respecting their disposition."
2,776,150
697,674,000
£
Francs
Outstanding Indebtedness Owed to the U. S. Government
$165,788,588.45, principal and interest, as of December 31, 1939, which is in default.
DANZIG
Danzig Port and Waterways
Dollar Bonds
1927
Board
Free City of Danzig Match
Loan (not publicly offered) 1930
Issued
Outstanding
1952
6y2%
4,500,000
3,483,500
1965
6%
1,000,000
945,885
5,500,000
4,429,385
On the foregoing issues it was proposed that interest be reduced to 4y2%
beginning January 1, 1938 on the 6y2% issue, and to 4%% beginning July 1,
1937 on the 6% issue. However, on the 6y>% bonds, funds in the hands of
the Trustees, together with proceeds from sale of securities in the reserve
fund, permitted payments of the January 1, 1938 and July 1, 1938 coupons at
the full 6^2% rate. The January 1, 1939 coupon received a payment on account
of $23.63 per $1,000 bond. The Port Board advised the Council July 26, 1939
that it could not remit funds at that time but hoped the situation would change,
suggesting that negotiations be postponed on account of the European situation.
Since the German occupation of Danzig in 1939 the bonds have been in
complete
default.
£
1,428,100
35
DENMARK
National
Kingdom of Denmark
Kingdom of Denmark
Kingdom of Denmark
Municipal
City of Copenhagen
City of Copenhagen
Danish Consolidated
Danish Consolidated
Guarantee)
Danish Producers Loan
(Serial)
Mortgage Bank, Kingdom of
Denmark
Dollar Bonds
1942
30,000,000
1922
6% 30,000,000
1955
19,200,000
1925
5^% 30,000,000
1928
1962
4H% 55,000,000 43,642,000
1927
1928
1925
1928
1952
1953
1955
1953
5%
4^%
5}4%
5%
15,000,000
12,000,000
7,000,000
2,000,000
15,000,000
12,000,000
2,980,000
2,000,000
1928
1940
5%
2,500,000
250,000
5%
5,300,000
4,369,000
1927
1972
National
Municipal
Corporate (Government guarantee)
.
Issued
Outstanding
115,000,000
36,000,000
92,842,000
31,980,000
4,619,000
158,800,000
129,441,000f
7,800,000
Full service, interest and amortization, was paid on all these issues through
1939.
12,047,760
48,056,000
59,655,000
£
Swedish Kronor
Florins
DOMINICAN REPUBLIC
Dominican Republic
Dominican Republic
Dollar Bonds
Sy
1922
1942
2%
1940
1926
5%%
Issued
Outstanding
10,000,000
10,000,000
7,406,000
7,844,000
20,000,000
15,250,000
Sinking fund payments, which were suspended in 1931, were renewed in
part during 1932 and 1933, and under the Readjustment Plan of August, 1934
(p. 57-67 Council's 1934 Report), sinking fund payments have since beenmade
in accordance with that Plan.
To December 31, 1939 57% of the 1940 issue and 37% of the 1942 issue were
stamped indicating assent to the Readjustment Plan of 1934. Full sj^% interest continues to be paid on the bonds assented and unassented. However,
after October 1, 1940 on one issue and March 1, 1942 on the other, when there
are no more coupons on the bonds, holders wishing to receive further interest
payments will be required under the provisions of the Plan of Readjustment
to have their bond maturities extended to October 1, 1969 and September 1,
1961 respectively, and to have additional coupons attached to cover the extended period, with interest continuing at the full contract rate.
—
tln addition there is outstanding a corporate bond,
$995,000 Burmeister & Wain, Ltd. 6% issue due July 1, 1940.
without Government Guarantee:
36
FOREIGN BONDHOLDERS PROTECTIVE COUNCIL, INC
ECUADOR
Dollar Bonds
Issued
Matures Interest
Issued
National
Ecuador Government"Salt"
1,075,000
Bonds
1908
4%
Outstanding
....
Guarantee)
Guayaquil and Quito First
Mortgage Bonds
1899
Guayaquil and Quito Non-
....
5%
1932
....
12,282,000
459,900
10,722,000
1,080,800
1,080,800
none
Outstanding
Issued
1,075,000
459,900
National
Corporate (Government Guarantee) 13,362,800
11,802,800
Interest Certificates
1908
14,437,800
12,262,700
Interest on the Government issue defaulted January 1915 and on the Railway bonds in July 1910. No interest payments havebeen made on these issues
since January 1929 and January 1914 respectively. Interest in arrears to December 31, 1939 has been computed at $13,863,708. Sinking fund defaults
occurred in 1910 and 1908.
71,300
8,386,000
£
Francs
EL SALVADOR
DollarBonds
...
...
Republic of El Salvador "A"
Republic of El Salvador "C"
Certificates of Deferred
Interest
Issued Outstanding
1923
1948
6,000,000
3,229,000
8%
1923
1957
1933
1948
7%
4%
10,500,000
8,546,700
993,985
305,825
17,493,985
12,081,525
Interest and sinking fund defaulted on these bonds in July and August
1932, and January 1933.
By Decree No. 210 of November 29, 1937 the service of the foreign debt as
specified in the Readjustment Agreement of April 27, 1936 was suspended from
January 1, 1938. The Readjustment Agreement of April 27, 1936 (p. 373-382
Council's 1936 Report) in Article 20 provides, in the event of non-compliance
by the Republic with any provisions of that Plan, that the Agreement shall be
null and void and the rights and remedies of the bondholdersshall thereupon
be those set forth in the Loan Contract.
It is noted that customs collections 70% of which are pledged for the
service of bonds of Series A, B, and C have averaged more than five million
dollars a year in the eight years since default, or more than four times the
annual contractual interest service of $868,822 on the dollar bonds.
—
—
Other ExternalObligations Outstanding
£
853,140
37
ESTONIA
DollarBonds
Republic of Estonia
1927
1967
7% $4,000,000 $3,339,500
Full service, interest and amortization, was paid through 1939.
599,900
£
6,899,681
Swedish Kronor
FINLAND
National
Republic of Finland
Dollar Bonds
1923
1945
6%
Municipal
City of Helsingfors
1930
guarantee)
Residential Mortgage Bank. 1928
Issued
Outstanding
10,000,000
4,002,000
1960 6^%
8,000,000
6,850,000
5%
10,000,000
3,934,000
1961
28,000,000
Full service, interest and amortization, has
always been paid
14,786,000
when due.
2,605,600
£
31,640,000
Swedish Kronor
$8,142,890.21, principal and interest, as of December 31, 1939.
Finland is the only country which is making full payments on its obligations owed to the United States Government.
FRANCE
National
Republic of France
Republic of France
Dollar Bonds
1921
1941 7y2%
1924
1949
7%
Issued
Outstanding
100,000,000
100,000,000
48,792,500
39,474,600
200,000,000
88,267,100
Of the $88,267,100 outstanding, $72,263,600, or about 82%, are stamped to
indicate French ownership.
Full service, interest and amortization, has been paid through 1939.
During 1939 outstanding bonds of the Nord Railway and the Paris-Orleans
Railroad were called for redemption at 102 and 100 respectively.
£
Florins
Swiss Francs
....................
1,994,650
230,000,000
180,375,000
$4,200,332,646.54, principal and interest, as of December 31, 1939, which is in default.
38
GERMANY
DollarBonds
Issued
National
1924
1949
7% 110,000,000
German Govt. (Dawes)
98,250,000
1965
German Govt. (Young)
1930
5^4% 125,000,000
1980
4^%
German Govt. (Match)*... 1930
25,000,000
1957
7%
Austrian Govt. (Intntl.) . 1930
Government Guarantee
69,000,000
1946
1936
3%
Conversion Office
State
2,000,000
1926 1927-46
7%
Anhalt (Serial)
15,000,000
1925 1926-45 6y2%
Bavaria (Serial)
10,000,000
6y2%
1925
1945
Bavaria
15,000,000
Bremen
1925
1935
7%
10,000,000
1926
1946
Hamburg
6%
1,000,000
Hanover (Harz Waterwks.) 1927
1957
6%
cy2%
4,000,000
1949
Hanover (Harz Waterwks.) 1929
7y2%
2,000,000
1925
1950
Lower Austria
3,000,000
1925 1926-45
7%
Oldenburg (Serial)
20,000,000
1926
1951 6y2%
Prussia
30,000,000
Prussia
1927
1952
6%
...
...
..
Municipal
1926
1951
7%
1926 1927-45
7%
6y2%
1925
1950
1928
1958
6%
1924 1954
8%
6y2%
1925
1950
Cologne
1925
1945
Dresden
7%
1925 1926-45
Duesseldorf (Serial)
7%
1925 1926-45
Duisburg (Serial)
7%
Frankfort A. M. (Serial).. 1925 1926-45
7%
6y2%
1928
1953
Frankfort A.M
1924
1954
Graz
8%
Hanover
1929
1939
7%
7y2%
1925
1950
Heidelberg
1926
1947
Leipzig
7%
1925 1926-45
Munich (Serial)
7%
1927
Nuremburg
1952
6%
1927
1953
Saarbruecken
6%
1927
1952
Vienna
6%
Wuerttemberg Consolidated. 1925 1926-45
7%
Baden Consolidated
Bavarian Palatinate Consol.
Berlin
Berlin
Carlsbad
Outstanding
59,633,400
91,305,600
119,611,600
20,180,800
25,547,900
700,000
5,313,000
6,818,000
3,088,500
10,000,000
836,500
2,790,500
478,500
1,696,500
17,406,000
20,776,000
4,500,000
3,800,000
15,000,000
15,000,000
1,500,000
10,000,000
5,000,000
1,750,000
3,000,000
4,000,000
6,250,000
2,500,000
3,500,000
1,500,000
5,000,000
8,700,000
5,000,000
3,000,000
30,000,000
8,400,000
1,949,500
12,191,000
1,002,500
4,772,500
1,733,500
803,000
651,000
1,460,500
4,809,500
1,914,000
2,956,000
1,254,000
3,068,500
4,776,000
2,815,000
5,000,000
1,274,500
10,000,000
25,000,000
25,000,000
30,000,000
50,000,000
26,000,000
3,000,000
3,600,000
3,000,000
3,000,000
6,000,000
1,141,000
8,242,500
6,751,000
9,191,000
14,427,000
1,573,500
971,000
1,239,000
325,000
444,000
852,500
3,134,500
5,849,500
339,000
4,310,500
3,206,000
Corporate (Govt. Gtd.)
Central Bank of German
State andProvincial Banks
Central Bank of German
Stateand ProvincialBanks
Consolidated Agricultural..
German Cent. Bank for Agr.
Lower Austria Hydro-elect.
6%
1927
1951
6%
1928
6y2%
1958
1925
1950
7%
1927
1960
6%
1927
1960
6%
1928
1938
6%
1924
6y%
1944
Municipal Bank of Hessen.. 1925 1926-45
7%
6y2%
Nassau Land Bank
1928
1938
6%}
1933
Prov. Bank of Westfalia... 1928
Extended to 1936-41
5%f
Rhine-Main-Danube Corp... 1925
1950
7%
*Not publiclyoffered.
1927
1952
39
Saarbruecken Mort. Bank A
SaarbrueckenMort. Bank B
Saxon Public Works, Inc..
Saxon Public Works, Inc.*.
Saxon State Mortgage Inst.
Tyrol Hydro-electric Power
1927
1927
1925
1926
.
1930
1932
1933
1925
1926
1927
1925
Tyrol Hydro-electric Power 1927
National
Conversion Office
State
6%
6%
7%
6^4%
5%
6%
5%
7%
6^%
6%
7y2%
7%
1947
1947
1945
1951
1932
1937
1943
1945
1946
1947
1955
1952
Municipal
Corporate (Government Guarantee)
..
Outstanding
Issued
1,000,000
1,000,000
15,000,000
15,000,000
10,000,000
6,940,000
6,700,000
5,000,000
4,000,000
2,000,000
3,000,000
3,000,000
587,000
671,500
4,077,500
4,117,000
1,000
717,000
2,250,000
2,372,000
2,024,000
1,061,000
2,330,500
1,967,500
Issued
Outstanding
938,890,000
517,7786,800
358,250,000
69,000,000
112,000,000
137,400,000
262,240,000
290,731,400
25,547,900
69,903,500
62,996,000
68,608,000
In addition there are the following Corporate Bonds without Government
Guarantee:
Interest
Issued
Maturity
Outstanding
Alpine Montan Steel
3,777,800
7% Mar. 1, 1955 5,000,000
650,000
Bank of SilesianLandowners
6% Aug. 1,1947 6,000,000
7,097,000
Berlin City Electric Company.
6% Apr. 1,1955 15,000,000
6,091,000
Berlin City Electric Company. 6^% Dec. 1,1951 20,000,000
Berlin City Electric Company. 6y2%
Feb. 1,1959 15,000,000 11,506,000a
15,000,000
9,837,000
Berlin El. Elev. & Under. Ry. 6y2%
Oct. 1,1956
3,560,000
Brandenburg Electric Power..
6% May 1,1953 5,000,000
..
.
Brown Coal Ind. "Zukunft"...
Central
Co
Consol. Hydro-Elect.
...
Municipal
Dortmund
Utilities.
East
Electric Power Corporation...
Electric Power Corporation...
First Bohemian Glass Works ..
General Electric Co
cy2%
6%
7%
cy2%
Prussian Power Co
6%
cy2%
cy2%
7%
6%
6y
General Electric Co
2%
General Electric Co
7%
German-Atlantic Cable Co
7%
German Bldg. & Land Bank. . 6^%
German Consol. Municipal....
7%
German Consol. Municipal
6%
Gesfuerel Debentures
6%
Good Hope Steel and 1r0n
7%
Hamburg Electric
Company
7%
—
Extended— interest reduced
6%
Extended interest reduced 4^%
Hamburg Elev.
— Under. Ry
Extended interest reduced.
2%
Hansa Steamship Line
6%
German Power
Works
.
....
....
.....
..
.
* Not publicly offered.
Apr. 1,1953
June 1,1934
Jan. 15, 1956
Oct. 1,1948
June 1,1953
Mar. 1, 1950
Apr. 1,1953
Jan. 1,1957
May 1,1948
Dec. 1,1940
Jan. 15, 1945
Apr. 1,1945
1,1948
1,1947
1,1947
1,1953
Oct. 15, 1945
Nov. 1,19351
Nov. 1, 1938 1Nov. 1, 1943 j
Jan.
Feb.
June
June
2,000,000
4,000,000
4,000,000
3,000,000
3,500,000
7,500,000
5,000,000
1,500,000
15,000,000
10,000,000
10,000,000
4,000,000
5,250,000
23,000,000
17,500,000
5,000,000
10,000,000
4,000,000
}2t\;l9%} «»
9
Oct. 1,1939
5,000,000
1,460,000
249,150
1,962,0U0
1,820,000
2,646,000
2,913,000
2,215,000
412,500
12,000,000
1,280,000
3,663,000
1,853,000"
2,550,000c
11,230,000
9,110,000
3,900,000
2,174,500
f 174,500
37,500
\[110,500
f 524,000 d
222,500
1
4,800,000"
a. Including$5,600,000 exchanged for 4y2 % internal bonds.
$240,000 called Apr. 1,1939 but no funds provided therefor.
c. Including$1,739,000 exchanged for 454% internal bonds.
d. Includes those deposited under Proposal 3 of Jan. 6, 1939.
c. Offered to pay at par at maturity with 75% interest in cash for final coupon. Howeve?
agent received only $200,000.
b.
40
...
Harpen Mining Corporation
6%
Housing and Realty Improvt..
7%
Ilseder Steel Corporation
6%
Karstadt (Rudolph) Inc
6%
Koholyt Corporation
6^%
Leipzig Overland Power
6y2 %
Leipzig Trade Fair Corp
7%
Luneburg Pwr. Lt. & Watrwks.
7%
Manheim & Palatinate Elect...
7%
Mansfeld Mining & Smelting..
7%
"MIAG" Mill Machinery
7%
Municipal Gas & Electric
7%
North German Lloyd
6%
North German Lloyd stamped.
4%
Oberpfalz Electric Power
7%
Pomerania Electric Company..
6%
Protestant Church in Germany
Welfare Institution
7%
Prussian Electric Company....
6%
Rheinelbe Union
7%
Rhine-Ruhr Water Service....
6%
Rhine-Westfalia Elect. Pwr....
6%
6%
6%
7%
Rhine-WestfaliaElect. Pwr....
7%
Extended
7%
Roman Catholic Church in
Bavaria
6^%
Roman Catholic Welfare Insti-
7%
6%
6*4%
Ruhr Housing Corporation.... 6%%
Siemens & Halske A.G
6*4%
Siemens & Halske A.G*
6%
Silesia Electric Corporation... 6^%
Public
Utilities
Co
Stettin
7%
7y2%
Tietz (Leonhard)
Corporation.
Industrial
United
6%
United Industrial Corporation. 6^%
Corp.
6y
Works
"A"
United Steel
2%
United Steel Works Corp. *'C" 6*4%
Corp
United Steel Works
6^%
Unterelbe Power & Light
6%
Vesten Electric Railways
7%
Westfalia United El. Pwr
6%
tutions in Germany
Ruhr-Chemical Corporation
Ruhr Gas Corporation
..
Issued
Outstanding
10,000,000
4,048,500
767,500
Nov.15, 1946
1,500,000
6,189,000
Aug. 1,1948 10,000,000
( 1,644,190'
Nov. 1, 1943 15,000,000 I3,393,685s
4,000,000
578,500
Mar.31, 1943
May 1, 1946
3,000,000
1,411,000"
1,509,000
May 1, 1953
2,000,000
678,500
May 1, 1948
1,100,000
June 1, 1941 3,000,000 1,920,000
574,000
May 1, 1941
3,000,000
June 1,1956 3,000,000 1,450,000
887,000'
Dec 1, 1947
1,500,000
1,258,000
Nov. 1, 1947 { onnrm
I
nftft
'
'
Nov. 1, 1947 j uuw uuu 111,148,500
620,500
June 1, 1946 1,250,000
3,500,000
2,404,000
May 1, 1953
Jan. 1,1949
Oct. 1, 1946
Feb. 1,1954
Jan. 1, 1946
Jan. 1,1953
May 1, 1952
Aug. 1, 1953
Apr. 1, 1955
2,500,000
4,000,000
25,000,000
10,000,000
15,000,000
20,000,000
20,000,000
10,000,000
Nov. 1.1950
Feb. 1,1936? 7500
' '000
Feb. 1, 1941 j
1,532,000
3,158,000
14,096,000 j
7,123,000
11,667,500
15,858,500
15,298,000
5,982,000
k
Mar. 1, 1946
5,000,000
3,257,000
June 1,1946
6,000,000
4,000,000
12,000,000
4,600,000
24,000,000
14,000,000
4,000,000
3,000,000
3,000,000
6,000,000
6,000,000
30,000,000
10,815,000
30,000,000
5,000,000
1,750,000
20,000,000
3,353,000
1,915,000
10,851,000
3,892,000
10,965,000'
11,000,000m
2,555,000
1,800,000
852,500
1,495,500
1,946,000
19,566,000 j
7,506,000 J
14,180,000'
808,500"
1,079,500
887,000
Apr. 1,1948
Oct. 1,1953
Nov. 1, 1958
Sept. 1, 1951
Jan. 15, 2930
Feb. 1.T946
Apr. 1, 1946
Jan. 1,1946
Dec. 1, 1945
Nov. 1, 1941
June 1, 1951
1951
July 1, 1947
Apr. 1, 1953
Dec. 1,1947
Jan. 1,1953
613,265,000 322,931,825
69 Issues
* Interest payable at not less than 6%.
—
f. Certificates only.
g. Bonds excluding certificates.
h. Coupons paid at face amount in dollars up to 1938.
i. Including$769,000 pledged for dollar bonds exchanged for Reichsmark bonds.
j. Offer Feb. 1, 1939 interest payments in dollars in N. Y. at 3 J4 %
k. 1936 and 1941 issues called at par Sept. 9, 1939.
1. Including $1,670,000 stamped accepting 3^4% debentures due 1951, payable in dollars
in N. Y.
m. Including $10,402,000 stamped accepting 4^% interest 1939 to 1951 inc. payable in
dollars in N. Y.
n. Excludes $1,214,000 deposited in Golddiskontbank for exchange to 4J^% internal issue.
—
.
41
On the 7% Dawes and 5% Young Loan dollar bonds, interest and sinking
fund defaulted in 1933 and 1934. While no sinking fund payments have been
made since default, on those bonds stamped "U.S.A. domicile Ist October
1935" within the time limit fixed by the German authorities as April 14, 1936,
interest is being paid at the rates of 5% and 4% respectively. No interest payments, however, have been made on bonds not so stamped within the time
limit.
On the Match Loan it is understood interest is being paid at the reduced
rate of 4y2%. It is also understood that no bonds of this issue are presently
held in this country.
On the Austrian Government bonds, no payments whatsoever have been
made since the anschluss in 1938.
On the 3% dollar funding bonds of the Conversion Office for German
Foreign Debts, interest was paid in full through 1939. Beginning January 1,
1940 holders were paid only if accompanied by an affidavit to the effect that
the holder was not a citizen nor resident of aay of a list of specified countries
which had severed relations with Germany.
On the other German dollar bonds non-Reich loans the German Government declared a transfer moratorium on June 9, 1933, effective as of July 1,
1933, restricting allocation of foreign exchange for transfer of service on nonReich debts. On June 30, 1933 the Reichsbank announced that all service
payments should be made in Reichsmarks on the due date at the rate of exchange of the previous day to the Conversion Office. The transfer moratorium
was modified subsequently so as to permit the payment, where full service in
Reichsmarks had been deposited by the obligor in the Conversion Office, of
the coupons maturing July 1, 1933 to December 31, 1933, both inclusive, 50%
in cash and 50% in "Konversionssperrmark" (blocked conversion marks),
which have no maturity and bear no interest, and which marks the Gold Discount Bank offered December 21, 1933 to purchase at 50% of their face value
(bondholders to receive 52% since the paying agents turned over to them their
commissions) ; offer to purchase marks withdrawn by Gold Discount Bank
September 15, 1934. On December 18, 1933 the Reichsbank announced that
payment would be made, where full service in Reichsmarks had been deposited
by the obligor into the Conversion Office, of the coupons maturing January
1, 1934 to June 30, 1934, both inclusive, 30% in cash and 70% in "Konversionssperrmark" (blocked conversion marks), which have no maturity and
bear no interest. In an Agreement signed in Berlin on January 31, 1934 the
Reichsbank announced that the Gold Discount Bank would purchase the
"Konversionssperrmark" issued with respect of the January 1, 1934 to June
30, 1934 coupons at 67% of their face value. However, that offer was withdrawn
on December 27, 1934 before the plan became effective. Pursuant to the Communique issued in Berlin on May 29, 1934 the Reichsbank made an alternative
offer regarding coupons maturing July 1, 1934 to June 30, 1935, both inclusive,
to issue 3% Funding Bonds of the Conversion Office to mature January 1,
1945, guaranteed as to principal, interest and sinking fund by the German
Government, or to pay 40% in cash for the full surrender of the coupons six
months after their due date. This 40% cash offer was withdrawn on November
3, 1934. The offer of May 29, 1934 to pay in 3% Funding Bonds the coupons
maturing during the period of July 1, 1934 to June 30, 1935 has been extended
as follows: To June 30, 1936 (in accordance with notice dated June 24, 1935);
to December 31, 1936 (in accordance with Decree of July 4, 1936); and to
June 30, 1937 (in accordance with notice dated February 8, 1937). Funding
Bonds available March 8, 1937 to June 30, 1938 on which latter date the offer
expired. No interest payments have been made on the non-Reich dollar bonds
—
—
42
for coupons coming due after 1936. While a registration statement was filed
with the Securities and Exchange Commission in Washington on March 6,
1939, covering the issuance of a second series of 3% Funding Bonds for interest
due and paid by the non-Reich debtors into the Conversion Office between
January 1, 1937 and December 31, 1938, this statement was withdrawnby the
German authorities on September 20, 1939 before the date set for hearings by
the Securities and Exchange Commission.
While the German authorities have been pleading lack of foreign exchange
to pay interest on their external bonds, it is noted foreign exchange has been
found to repatriate during the past three years bonds of a face amount of
more than $160,000,000, this figure representing the principal amount by which
the non-Reich loans (including those without government guarantee) were
reduced between December 31, 1936 and December 31, 1939, the period for
which no interest payments were made either in cash or in funding bonds.
Outstanding
Swiss Francs
Swedish Kronor
Lire
Francs
Florins
Belgas
Reichsmark
£ Egyptian
Drachma
Belgian Francs
Aust. Schillings (gold)
Pesetas
Czech Crowns
275,506,270
129,761,406
522,994,015
2,775,170,740
67,876,052
37,803,907
31,905,685
138,770
503,600
6,239,500
41,576,000
33,940,500
359,313,000
In addition to these amounts, there are outstanding certain 3% and 4%
Funding Bonds of the Conversion Office, issued in payment of matured interest coupons on non-Reich bonds in foreign currencies other than dollars. On
December 31, 1938 the amounts outstanding were as follows:
Various
Currencies
4% Sterling
4% Swiss Francs
4% Guilders
4% Swedish Crowns
3% Swiss Francs
3% Guilders
3% French Francs
3% Sterling
3% Canadian Dollars
3% Danish Crowns
3% Reichsmarks
9,200,000
113,136,000
4,097,000
39,444,000
6,400,000
8,331,000
8,067,000
85,000
82,000
4,000
70,742,000
Equivalent
inRM
101,912,000
63,570,000
5,445,000
23,491,000
3,596,000
11,043,000
505,000
943,000
196,000
2,000
70,742,000
In addition to the Funding Bonds there are certificates of indebtedness
(scrip) and other obligations outstanding as of December 31, 1939 in the
amount of 483,676,000 RM.
Conversion rates: 1 £.=RM 11.06; 1 Sw. Fc.=RM .5618; 1 Guilder=RM
1.329; 1 Sw. Kr.=RM .5958; 1 Fr. Fc.=RM .0626; 1 Can. $=RM 2.39; 1
Danish Crown=RM .5075.
43
Austrian Indebtedness
Army of Occupation Costs
Mixed Claims Awards
$26,011,672.09
RM 1,020,153,871.19
RM 2,103,750,000.00
RM 3,123,903,871.19 con-
verted at 40.33tf per RM amounts to
as
$1,259,870,431.25
$1,285,882,103.34,
Total
of December 31, 1939, which is in default.
GREAT BRITAIN
Outstanding IndebtednessOwed to the U. S. Government
$5,574,430,793.82, principal and interest, as of December 31, 1939, which is in default.
GREECE
Dollar Bonds
Greek Government
Greek Government
Hellenic Republic (Athens
10,361,000
1924
1964
7% 11,000,000
1928
1968
6% 17,000,000 16,581,500
Waterworks)
1925
1952
8%
11,000,000
9,102,000
39,000,000
36,044,500
On the first two issues, which are American tranches of League Loans,
interest and sinking fund defaulted May 1, 1932 and August 1, 1932. Interest
payments since that time have been at rates ranging from 27y2 % to 40% of
the face amount of the coupons. The 1939 coupons were paid at the 40% rate,
being so stamped and returned to holders. The Greek Minister of Finance
announced on March 27, 1940 that from April 1, 1940 until the end of the
war, 43% of the face amount of the coupons would be paid on account, but
that sinking fund payments would remain suspended.
On the Athens Waterworks loan, which defaulted on sinking fund in 1930
and on interest onOctober 1, 1932, holders accepting the Agreement of August
16, 1935 were offered $50.64 per $1,000 bond for past due interest to October
1, 1934, and 4% interest thereafter, with bond maturity extended from 1952
to 1984.
£
Francs
Canadian Dollars
58,047,986
137,022,500
6,285,000
Partial payments on account of interest have been made since 1933.
44
GUATEMALA
Republic of Guatemala
(Los Altos Railway)
(Match Loan)
(Los Altos Railway)
Los Altos Scrip
Guatemala Scrip
Dollar Bonds
1924
1934
1,000
8% [4,950,000]**
1927
1930
1936
1933
1933
8%
7%
1951 3-3y2%
1948
1960
2,515,000
2,500,000
1,316,000
1,722,000
1,452,000
34,980
26,620
1,480
26,620
6,798,600
2,797,100
1934
1934
f
Interest and sinking fund went into default between April 1932 and November 1933. On the Los Altos Railway 3-3y2 % Readjustment bonds of 1936,
interest has been paid in full, while on the 8% bonds of the Republic interest
was paid during 1939 at 50% on account.
fThe 7% Match Loan bonds of $2,460,484 were sold during the course of
the year for $900,000. Provisions of the contract signed April 5, 1939 between
the Secretary of State for Finance and Public Credit and Mr. William Rosenblatt are as follows:
"First: Mr. William Rosenblatt agrees to sell, transfer and deliver to the
Government of the Republic the total issue of the Gold Bonds, with Amortization Fund of the External Debt of Guatemala, with interest at 7%, due 1960,
together with all unpaid coupons and those coupons stamped '4% paid' instead
of 7% and all over due scrip, issued by the Government of Guatemala in accordance with the contract signed on August 16th, 1930, between the Government of the Republic, the Swedish Match Company of Stockholm Svenska
Tandsticks Aktiebolaget and the N. V. Financieele Maatschappij Kreuger &
Toll, of Amsterdam, Holland; the totalbalance of which documents to date
is $2,460,484.01. (Two million four hundred and sixty thousand, four hundred
and eighty-four dollars and one cent) in respect of the Bond issue; $36,900.00
(Thirty-six thousand, nine hundred dollars) in respect of scrip, and $405,979.86
(Four hundred and five thousand, nine hundred and seventy-nine dollars,
eighty-six cents) in respect of overdue interest up to the Ist March last. To
this sum should be added whatever amount corresponds to interest accrued
for the month of March, as also to whatever number of days of the present
month may expire up to the date on which the Bonds and other documents be
delivered.
"Second: The Government of the Republic, in exchange for the delivery
of the Bonds and documents referred to in the preceding clause, shall pay to
Mr. Rosenblatt the sum of Nine hundred thousand dollarsUnited States Currency ($900,000.00 U. S. Cy.), in the act of receiving said documents.
"Third: Both the handing over of the Bonds, Scrip and other documents,
and the payment of the $900,000.00 U. S. Cy. referred to in the preceding
clauses, shall be effected in the City of New York, United States of America,
not later than the twentieth of this month, through the medium of a Bank to
be designated by the Central Bank of Guatemala, on instructions from the
Government of the Republic and the approval of Mr. Rosenblatt."
1,490,620
£
** Exchanged for
1936 bonds. Not included in totals.
45
HAITI
Dollar Bonds
Republic of Haiti "A"
Republic of Haiti "C"
1922
1952
6%
1923
1953
6%
Outstanding
Issued
16,000,000
2,660,000
6,868,500
1,106,492
18,660,000
7,974,992
Interest
dollar bonds of Haiti is being paid in full. However, since
January 1, 1938 only token sinking fund payments have been made. On July
8, 1939 a supplementary agreement was signed by the governments of the
United States and Haiti, further suspending sinking fund payments to September 30, 1940, but making during that suspended period, a token payment of
$20,000.
on the
Official
do not include an external indebtedness amounting to
Francs 26,934,000 of the French Loan of 1910. The Haitian Government called
the entire issue for payment at par in 1923, but it is understood 50,506 bonds
of 500 Francs each have not been presented for payment. It is understood an
adjustment of this debt was included in the Commercial Agreement of June
24, 1938.
reports
HUNGARY
Dollar Bonds
7y2%
1924
1944
1979
4^%
National
Kingdom of Hungary
Municipal
fCity of Budapest
fHungarian Consolidated
fHungarian Consolidated
National
Municipal
....
1927
1925
1926
1962
1945
1946
6%
7*4%
7%
Issued
iOutstanding
9,000,000
[6,578,600]
148,200
6,430,400
20,000,000
10,000,000
6,000,000
17,186,000
7,994,000
5,168,000
Issued
Outstanding
9,000,000
36,000,000
6,578,600
30,348,000*
45,000,000
36,926,600
* Of
this amount it is understood $19,363,000 have been stamped as repatriated.
t Figures of Cash Office received Aug. 14, 1940 give outstanding amounts on Apr.
as follows:
Budapest 6%
Hungarian Con. 7y
2%
Hungarian Con. 7%
30, 1940
Non-Nationalised
6,142,000
3,387,000
2,032,000
Nationalised
10,697,000
4,661,000
3,167,000
Total
16,839,000
8,048,000
5,199,000
11,561,000
18,525,000
30,086,000
46
In addition there are the following outstanding
corporate dollar bonds,
Out-
Out-
standing standing
Total
In- Ma- Non-NaNaOutterest turity tionalized tionalised standing
British and Hungarian Bank, Ltd
7l7l/2%
Budapest New Race Course Bldg
8%
City Savings Bank Co. of Budapest... 7%
Co-op. Soc. of Hungarian Mtg. Inst... 7%
Farmers Ntl. Mortgage Inst. "8".... 7%
Farmers Ntl. Mortgage Inst. "M".... 7%
7y2%
Farmers Ntl. Mortgage Inst
7y2%
First Ntl. Savings Bank of Pest
Hungarian Banks' Co-operative Soc... 7y2%
Hungarian Central Mut. Credit Inst.
7%
Hungarian Com'l Bank of Pest
7%
7y2%
Hungarian Com'l Bank of Pest
Hungarian Discount & Exch. Bank... 7H%
Hungarian Discount & Exch. Bank. .
7%
Hungarian General Credit Bank
7%
Hungarian General Credit Bank
7%%
Hungarian General Savings Bank.... 7y2%
Hungarian-Italian Bank Series "A".. 7%
Hungarian-Italian Bank, Ltd., "A"... 7*4%
7y2%
Hungarian-Italian Bank, "A-B"
7y
Hungarian-Italian Bank, Ltd
2%
Hungarian-Italian Bank, Ltd., "A-C". 7y2%
Hungarian Land Mortgage Inst. "A". 7*4%
Hungarian Land Mortgage Inst. "B". 7y2%
Nat'l Assn. Hungarian Land-Credit.. 7y2%
Nat'l Cent. Say. Bank of Hungary "A" 7y2%
Nat'l Cent. Say. Bank of Hungary "B" 7y2%
Nat'l Hungarian Ind. Mtg. Inst. "A".. 7%
..
.
Protestant Central Credit Union
Rima Steel Corp
97,000
396,000
1962 299,000
3,000
23,000
1951
20,000
1953 474,000 310,000 784,000
1967 2,658,000 307,000 2,965,000
20,000 1,402,000 1,422,000
1963
1963
362,000
1965
1961
none
1966
1937
1962
1961
1961
1963
1961
1961
116,000
739,000
676,000
1,014,000
10,000
170,000
701,000
114,000
119,000
23,000
1961
1962
none
20,000
1962
33,000
1963
1964 1,859,000
1963 434,000
1961 1,099,000
1961
1964
1962
1962
1948
7% 1963
7% 1955
824,000
6,000
366,000
1,256,000
950,000
none
1,799,000
528,000
296,000
2,500,000
87,000
519,000
1,762,000
506,000
1,772,000
2,294,000
1,045,000
900,000
603,000
65,000
614,000
867,000
73,000
388,000
628,000
1,349,000
207,000
281,000
197,000
1,069,000
890,000
296,000
2,616,000
826,000
1,195,000
2,776,000
516,000
1,942,000
2,995,000
1,159,000
1,019,000
626,000
65,000
634,000
900,000
1,932,000
822,000
1,727,000
2,173,000
213,000
647,000
1,453,000
2,019,000
none
none
86,000 1,885,000
16,161,000 20,755,000 36,916,000
On the Kingdom Loan interest went into default February 1, 1934 and
sinking fund on February 1, 1933. Holders were offered payments of 50% of
the face amount of the coupons coming due from default to and including
August 1, 1937. Under the permanent Plan of September 17, 1937, interest was
reduced from 7y2 % to 4y2 % and the maturity of the bonds extended from
1944 to 1979. To the end of 1939 more than 97% of the outstanding bonds had
accepted the permanent Plan.
On the Municipal bonds and other non-governmental Hungarian longterm dollar bonds, in default since 1932 and 1933, holders were offered interest
payments at the rate of iy% per annum for the coupons coming due during
the 3 year period August 1, 1937 to July 31, 1940, such payments being available only 180 days after the respective coupon maturity dates. To the representations made by the Council on March 14, 1940 urging that negotiations be
undertaken with a view to increasing the offer of 1^4% temporary interest
service which expires on July 31, 1940, the President of the National Bank of
Hungary replied that not later than June it was expected they wouldbe able
to advise the Council of their suggestions and proposals.
47
11,330,041
£
155,460,286
Lire
Swiss Francs
56,643,070
543,187,827
Francs
3,562,000
Swedish Kroner
4,940,140
Florins
64,947,000
Czechoslovakian Crowns
Belgian Francs
35,027,600
...
43,052,943
Pengo
$2,412,700.53, principal and interest, as of December 31, 1939, which is in
default. Partial payments on account have been made since
December 1937.
IRELAND
Dollar Bonds
National
Issued
15,000,000
Irish Free State
1927
1960
5%
Full service, interest and amortization, has been paid.
Outstanding
859,500
ITALY
National
Kingdom of Italy
Dollar Bonds
1925
1951
7%
Municipal
1927
City of Milan
City of Rome
1927
Corporate (Govt, guarantee)
1952
1952
1927
1947
Credit Consortium
Issued
66,174,400
6*4%
6J4%
30,000,000
30,000,000
17,014,100
16,181,300
7%
7,500,000
4,044,000
Issued
National
Municipal
.
Outstanding
100,000,000
Outstanding
100,000,000
60,000,000
7,500,000
66,174,400
33,195,400
4,044,000
167,500,000
103,413,800
In addition there are the following outstanding corporate dollar bonds
Apr. 1,1952
2,955,500
Adriatic Electric Co
5%
Ernesto Breda Co
Feb. 1,1954
1,408,000
7%
6y2%
1,839,500
Ercole Marelli Electric Mfg. C0
Nov. 1,1953
Isarco Hydro-Electric Co
May 1,1952
2,432,000
7%
362,000
Isotta Fraschini
7%
June 1,1942
12,817,000
Italian Public Utility Credit Inst..
7%
Jan. 1,1952
Lombard Electric Co. "A"
Dec 1,1952
4,392,500
7%
Apr. 1,1957
9,163,000
Meridionale Electric Co. "A"
7%
Mortgage Bank of Venetian
979,000
Provinces
7%
Oct. 1,1952
Apr. 1,1960
6,539,000
Piedmont Hydro-Electric Co. "A".. 6y2%
cy2%
8,491,000
Terni "A"
Feb. 1,1953
3,629,000
United Electric Service Co. "A" .
7%
Dec. 1,1956
....
.
..
55,007,500
48
Full service, interest and amortization, have been paid through 1939.
Exchange restrictions were adopted in 1935. In that year the Italian Government requisitioned all foreign securities and all Italian securities issued
abroad and held by Italian citizens. In the balance of payments of the United
States for 1938 (as published by the U. S. Dept. of Comm.) it was estimated
that approximately 55% of the Italian dollar bonds had been repatriated.
1,774,660
£
$2,025,525,996.77, principal and interest, as of December 31, 1939, which is in
default.
JAPAN
National
Japanese Government
Japanese Government
Dollar Bonds
1924
1954
6%%
5j4%
1930
1965
Issued
Outstanding
150,000,000
71,000,000
102,088,200
63,843,000
Municipal
1927
1926
Tokio
Yokohama
1961
1961
5^%
6%
20,640,000
19,740,000
14,620,000
14,584,000
1944
1950
1953
1953
1958
1971
1955
1953
1945
7%
6^4%
6^%
6%
5^4%
5^4%
7%
6%
7%
15,000,000
13,500,000
9,000,000
19,900,000
19,900,000
22,800,000
15,000,000
70,000,000
14,000,000
4,197,000
4,054,000
5,672,000
11,440,000
12,168,000
20,714,000
1,682,500
51,620,000
4,649,500
Corporate (Govt, guarantee)
Great Consol. El. Power.. 1924
Great Consol. El. Power.. 1925
1928
Nippon El. Power
Oriental Development
1923
Oriental Development
1928
Taiwan Electric Power Co. 1931
Toho Elect. Power
1925
1928
Tokyo Elect. Light
Ujigawa Elect. Power.... 1925
$221,000,000I
Outstanding
$165,731,200
$460,480,000I
$311,332,2001
Issued
National
40,380,000i
Municipal
Corporate (Government guarantee) 199,100,000I
29,204,000
116,197.000
Interest and amortization have been paid in full on the dollar bonds.
Beginning April 1, 1939 six issues of corporate bonds were added to those
previously outstanding by reason of their guarantee, effective as of that date,
by the Japanese Electric Generation and Transmission Company and the
Imperial Japanese Government.
Other Foreign Obligations Outstanding
£
French Francs
87,800,425
471,080,500
tin addition there is outstanding a corporate issue, without Government Guarantee:
$4,962,000 Shinyetsu Electric Power Co. 6y2% due Dec. 1, 1952
49
LIBERIA
Dollar Bonds
National
Issued
Outstanding
Republic of Liberia
$2,588,000
$1,512,000
1926
1966
7%
This issue, which defaulted July 1, 1932, was not publicly offered, and is
understood to be held entirely by Finance Corporation of America, Cleveland,
Ohio. Interest was reduced to 5% per annum during the period January 1,
1935 to December 31, 1942.
LITHUANIA
Dollar Bonds
National
Issued Matures
1920 1935(45)
Lithuanian Government
(Liberty Loan)
Republic of Lithuania (Match) 1930
1965
Interest
Issued Outstanding
1,848,150
501,600
5%(4%)
6% (434%) 4,500,000* 4,199,094
6,348,150
4,700,694
On the Liberty Loan, originally due in 1935, the maturity was extended to
1945 and interest is currently paid at 4%.
On the Match Loan interest was reduced in 1932 from 6% to 4%%.
No Other External Obligations Outstanding
However, Lithuania has a sterling war debt owed to the Government of
Great Britain of £30,000.
Outstanding Indebtedness
Owed to the U. S. Government
MEXICO
National
Republic of Mexico
—
Receipts— Class A
Receipts Class B
Dollar Bonds
1904
1954
4%
752,000
1,500,000
1,000,000
752,000
1,500,000
1,000,000
25,000,000
3,320,986
6,641,973
(Approx.) 3,962,508
819,148
21,877,100
3,320,986
6,641,973
1,932.930
819,148
—
1900
1898
1900
Jalisco
Jalisco
Corporate (Gvt. Guaranteed)
Irrigation Works
1908
Receipts Class A
Receipts Class B
Cash Warrants
Scrip Receipts
—
—
1940
1928
1930
1943
* Originally $6,000,000 issued. Of the $4,500,000,
Outstanding
37,037,500
4,391,940
8,783,880
2,927,960
1,317,582
211,529,454
Cash Warrants
Scrip Receipts
Railways Expropriated 1937
State
Coahuila
Issued
40,000,000
4,391,940
8,783,880
6,002,318
1,317,582
211,529,454
6%
6%
6%
4H%
$500,000 represents unpaid interest.
50
FOREIGNBONDHOLDERS PROTECTIVE COUNCIL, INC
Outstanding
Issued
National including 20 Railways expropriated 1937
272,025,174
State
Corporate (Gvt. guaranteed)
3,252,000
39,744,615
265,988,316
3,252,000
34,592,137
315,021,789
303,832,453
These bonds went into default in 1913 and 1914
On the National, Guaranteed, and certain of the Railway bonds, depositing
bondholders were offered Class A Receipts for interest coming due through
1916; Class B Receipts for interest coming due thereafter through 1922; 1923
coupons were offered payment by issuance of 50% in Cash Warrants and 50%
in Scrip Receipts; 1924 coupons 70% in Cash Warrants and 30% in Scrip
Receipts; 1925 coupons 90% in Cash Warrants and 10% in Scrip Receipts;
and 1926 and 1927 coupons 100% Cash Warrants.
No payments whatsoever have been offered since default on the State
bonds.
37,005,223
263,891,790
8,668,508
£
Francs
Marks
NORWAY
National
Kingdom of
Kingdom of
Kingdom of
Kingdom of
Kingdom of
Norway
Norway
Norway
Norway
Norway
Dollar Bonds
7,164,000
1923
1943
6% 20,000,000
25,000,000
10,880,000
1924
1944
6% 17,000,000
17,000,000
1936
1956
4^%
1965
1936
A%% 31,500,000 31,500,000
1937
1963
4% 29,000,000 27,950,000
Departmental
Dept. of Akershus
1938
1968
4%
7,000,000
7,000,000
Municipal
City of Oslo
1936
1955
4^4%
6,500,000
5,927,000
guarantee)
Norway Municipalities Bank. 1930
1970
5%
5,360,000
5,046,000
Issued
National
State
Municipal
Outstanding
122,500,000
7,000,000
6,500,000
5,360,000
94,494,000
7,000,000
5,927,000
5,046,000
141,360,000
112,467.000
Full service, interest and amortization, has been paid on all issues through
1939.
£
Francs
Swedish Kronor
Swiss Francs
6,150,007
142,090,000
107,477,000
46,062,000
51
Dollar Bonds
National
Republic of Panama
lepublic of Panama
Lrrears
Certificates
Municipal
ity of Panama
Issued
Outstanding
4,500,000
12,000,000
5%
1,046,568
3,603,000
11,313,500
1,033,986
1923
1953
5*4%
1928
1963
5%
1933
....f
1927
1952
6*4%
500,000
371,500
1946
1947
6^4%
1,000,000
1,000,000
697,500*
750,000*
Corporate (Govt. Guarantee)
Bank of Panama "A".. 1926
fat!. Bank of Panama "B".. 1927
6j4%
Issued
National
....
Municipal
"
Outstanding
17,546,568I
500,000
2,000,000>
15,950,486
371,500
1,447,500*
20,046,5681
17,769,486
On the Sy2% issue of the Republic interest payments have been made in
full, but not on their due dates, and sinking fund has been in default since
March 1, 1938. On the 5% issue bondholders were offered cash and scrip
payments for interest through 1935, and interest at the rate of 4% per annum
for the May 1, 1935 coupon.
On April 5, 1940 Panama made an offer to the holders of the 5% bonds, a
summary of the terms of which, together with the Council's recommendations,
are contained in the following statement issued by the Council on April 5, 1940:
"The Government of Panama has now offered a plan of service on the
above mentioned bonds which, for reasons more fully stated below, the Council feels it to the interest of the bondholders to accept. Bondholders are referred to the prospectus of the Republic of Panama for the terms of the offer,
some of the provisions of which are summarizedbelowmerely as a convenience
of reference to the bondholders.
Summary of the Plan
"Holders of the 5% bonds are asked by Panama to deposit them with the
Bank of the Manhattan Company, 40 Wall Street, New York, N. V., until the
plan is either made effective or abandoned by October 25, 1940 (although this
date may be extended by the Republic), in exchange for Certificates of Deposit which the Council has been advised have been admitted to listing on
the New York Stock Exchange. If the plan is abandoned the bonds are to
be returned without charge to the bondholders. If the plan is made effective
bondholders are to be offered, par for par, new 3%%0 bonds, due December 1,
1994, in lieu of their present 5% bonds. Increases in the income of the Constitutional Fund over $200,000 per annum will be used to increase the interest
rate to a maximum of 3y2%0 per annum. The June 1, 1940 coupon on the 3*4%
bonds will provide for payment of interest for a 6y2 months period, commencing November 16, 1939. If 80% of the holders accept, but not the full
amount, the 5% bonds are to be stamped, (see the prospectus for the text)
and returned to the bondholders. Upon receiving the new 3J4% bonds, or the
return of the stamped 5% bonds, back interest due on these bonds to and
maturity.
*t No
Council understands
$1,227,000 are held by
the National Bank of Panama.
52
including November 15, 1939 is to be paid at the rate of 4% instead of 5%.
(Bonds with interest coupon due May 15, 1933 endorsed $16.78 paid and all
subsequent coupons to and including November 15, 1939 attached, except
coupon due May 15, 1936, are to receive $243.22 per $1,000 bond, and those
bonds with coupon dated November 15, 1936 and all subsequent coupons to
and including that due November 15, 1939 attached, are to receive $140.00 per
$1,000 bond.) The holders of arrears certificates issued for interest due 1933,
1934 and 1935 are to be offered, par for par, new 3% bonds due in 1987, but
will be asked to relinquish all claims to such interest as may have accrued on
the arrears certificates.
"Panama is pledging for the service of the new bonds under the plan
(Series B Bonds, deposited 5% bonds and new 3%%) bonds) the $180,000 per
year constituting the difference between the present Canal payment of $430,000
per year and the $250,000 per year which the United States and Panamanian
Governments consider, as more fully set forth below, to be the sole amount
of the Canal annuity pledged to the service of the 5y2 % and 5% bonds now
outstanding. The Republic is also pledging to the service of the above mentioned new bonds the difference between $200,000 per annum and the annual
income of the so-called 'Constitutional Fund.
"The offer and Deposit Agreement provide that there shall be no expense
to the holders of the 5% bonds in connection with the deposit thereof and no
lien on the deposited securities is to be created to assure payment of compensation and expenses of the Depositary. Also, upon request at the time of
deposit, the Republic through the Depositary agrees to reimburse depositors
for all ordinary expenses of forwarding bonds for deposit, including cost of
registration and insurance, except war-risk insurance.
"The deposited 5% bonds are asked to accept a reduction ofinterest to 3%%
(or a possible 3I3 I
/2%), an extension of the maturity of the bonds of 31 years, to
1994, and to waive in favor of the Series B Bonds their right to a first lien on
the so-called 'Original Treaty Payment' upon the redemption of the Sy2%
bonds and to relinquish the liens on the internal revenues now pledged to
their service. The Council endeavored, without success, to have these liens on
the internal revenues retained as it feels such action would be but fair and
equitable. These revenues have been unilaterally withheld from the service of
thebonds for the past several years.
"The plan provides that the prior lien Sy2% bonds are to be retired by the
sale of $4,000,000 of new Series B Bonds, carrying a rate of interest not greater
than 4^4%. Any saving in interest below 4^% will be added to the amortization, thus accelerating the retirement of these bonds and advancing the time
when these pledged revenues will accrue in full to the deposited 5% bonds
or the 3%%0 bonds.
Position of Undeposited Bonds
"Holders of undeposited 5% bonds will receive payment of unpaid matured
interest coupons to November 15, 1939 on the same terms provided for depositing 5% bondholders at such time and place as the Republic may advise
by published notice thereof. Undeposited 5% bonds will not enjoy the additional security of the new Treaty payment of $180,000 nor the guarantee by
the Republic of any deficiency in the Constitutional Fundincome below $200,000. Holders of undeposited bonds, however, will not impair their legal right
to receive, pro rata with stamped 5% bonds, 75% of the original Treaty payment and the Constitutional Fund income pledged under Article Sixteenth of
the 1928 Fiscal Agency Contract; the remaining 25% of such pledged revenues
being the pro rata share thereof applicable to the Series B Bonds. The 75%
53
share of the pledged revenuesin 1939 applicable to the service of the 5% bonds
would have been enough to provide interest on all the 5% bonds at a rate of
about 2.88% per annum. The plan offers the holders of deposited 5% bonds
3%% (or a possible 3y2 %) interest per annum and an annual sinking fund.
Holders of 5% bonds who do not deposit will receive such payments by way
of annual interest as the pledged revenues may permit, which the Republic
states, it appears unlikely will exceed 3% per annum and will forego the benefits of the additional security referred to above. However, the amounts paid
as annual interest on the undeposited bonds will be interest on account and
not for surrender of the coupons and no coupon will be finally surrendered
until the payments on account total the full face amount thereof.
Why the Bonds are in Default
"The 5% bonds are the irrevocable obligation of the Republic for the payment of the principal and interest of which as well as amortization there is
pledged the good faith of the Republic, and, as a further guarantee and security
(a) a first and prior charge on four internal revenues; (b) a second charge on
the annual Treaty payments receivable from the United States under the
Treaty of 1903, subject to the lien on account of the Thirty Year Sy2% External Secured Sinking Fund GoldBonds, dated June 1, 1923, due June 1, 1953;
and (c) a second charge, subject to the prior lien of the same Sy2 % bonds, on
the net interest, income, and revenue from all investments constituting the socalled 'Constitutional Fund of Panama.
"While the internal revenues under (a) above have been sufficient in every
year to serve these 5% bonds the Republic of Panama has failed to transmit
these funds to the Paying Agent on the plea that they were needed for internal
development, public works, etc. This action, in contravention of the definite
contract pledges of the Republic, has forced the reduction of the service on
the 5% bonds to such amounts as are left from the proceeds of the Canal
annuity payments and the income from the Constitutional Fund after the
prior lien bonds have been served.
"Furthermore, the Panamanian Governmenttook the position that it would
not be able to resume payments on these bonds until the matter of the payments of the Canal annuity due from the United States Government to Panama
were made in accordance with the Treaty of 1903. The Canal annuities from
1934 to 1939 were not paid until September 1939. The Treaty of 1903 called
for payment in gold coin of the United States of $250,000 per annum. Article
VII of the General Treaty of March 2, 1936 between the United States and
Panama provided that beginning with the annuity payable in 1934 payment
under the Treaty of 1903 should be 430,000 balboas, each balboa to contain
987j^ milligrams of gold of 0.900 fineness. After the ratification of the Treaty
six payments of 430,000 balboas each were due, or a total of 2,580,000 balboas,
which were paid in an equal amount of United States currency dollars. The
Governments of the United States and of Panama have taken the position that
the annuity provided for in the Treaty of 1936 is not the equivalent of the
annuity for which provision is made in the Treaty of 1903; they consider
250,000 in present currency dollars of the new annuity the equivalent to the
former annuity and that the excess over that amount is intended as an additional grant to Panama by the United States made in consideration for grants
made to the United States in the Treaty of 1936. That is to say, the two Governments now consider that 250,000 currency dollars and not the 430,000 currency dollars paid annually at the present time is all that is pledged as Canal
payments for the service of the prior lien Sl
/2 % bonds and, in the second instance, for the 5% bonds.
54
Service Funds Available if Plan Not Adopted
"The income from the so-called 'Constitutional Fund', on which the 5%
bonds likewise have a second position, has been bringing in approximately
$180,000 a year. This with the $250,000 of the Canal payment amount to about
$430,000 a year, which the bondholders are now permitted, under the interpretation of the two Governments, to look to for payments on their bonds, if
no new plan be put into effect. The prior lien 5^% bonds require $281,000 a
year (plus a market fund of $25,000 per annum) for service through 1944;
$479,000 a year from 1945 to 1953. This means that there would be but
$149,000 a year left for the service of the 5% bonds through 1944 (should the
market fund not be utilized), which is about 1.3% on the present amount
outstanding; and from 1945 to 1953 there would be no surplus available, in
fact, there wouldbe a deficit in the sinking fund of the prior lien 5^4% bonds
which would probably extend the life of those bonds beyond 1953. Thereafter
the full $430,000 a year would be available for the 5% bonds. The contractual
interest on these bonds requires $565,675 a year. Thus, even after the prior
lien 5^% bonds are retired some 13 to 15 years hence, during most of which
time the 5% bonds would receive no interest whatsoever, there would beavailable for interest and amortization 3.8% per annum on the bonds outstanding
and there would not be sufficient funds available to pay the 4% now offered
on the back due interest up to November 15, 1939. This back due interest
amounts to $2,102,864.83. Of the $2,580,000 paid by the United States in
September 1939 for the six defaulted Canal annuities, only $1,500,000, under
the interpretation of the two Governments referred to above, is considered
pledged to the outstanding bonds. $71,727.13 of this was applied to the payment of the December 1, 1939 interest coupon on the 5^2% bonds. Deducting
this amount and adding $29,221.76 in the hands of the Fiscal Agent for the
5% bonds, there is left $1,457,494.63 as a maximum availablefor back interest.
This would pay about 3.46% on the bonds now outstanding. However, the
Republic claims $860,347.46 of this amount and there would undoubtedly have
to be long litigation before the claim could be finally settled. While the Council considers the claim unfounded and is confident the courts would award
the money to the bondholders, in the contrary case there would be but
$597,147.17 available for back interest, which would be sufficient to pay at the
rate of but 1.4%.
Service Funds Available Under the Plan
"Under the plan now offered by Panama the annual service of $240,000 a
year on the $4,000,000 of new Series B Bonds to be issued to retire the outstanding $y2%0y
2 %o bonds, is considerably less than the annual service requirements of the presently outstanding Zl/2%Z l
/2% bonds, (as set forth above), leaving
more of the available revenues for service of the junior lien bonds under the
plan. Also, the Government of Panama is pledging the difference between
the present Canal annuity of 430,000 balboas (each balboa to contain 987^2
milligrams of gold of 0.900 fineness) and the $250,000 that is now considered
by the two Governments as the only amount of the Canal payments pledged
to the presently outstanding bonds, to the service of the new bonds under the
plan (Series B Bonds, deposited 5% bonds and new 3%%0 bonds). Likewise
the Government agrees to make up any difference between the yearly income
from the Constitutional Fund and $200,000, this difference is also pledged
for the service of the assented bonds. Also, upon the plan becoming effective
the new 3%.% bonds will have a first and prior lien on the income from the
Constitutional Fund.
55
Why the Council Is Recommending the Plan
"In view of the fact that the only revenues pledged to the bonds which
Panama is willing to make available to the bondholders outside of the plan,
will, under the present interpretation of the United States and Panamanian
Governments, produce for at least 13 or 14 years less than the 3%% offered
under the plan (in fact during most of that time will provide no interest
whatsoever) and is not sufficient to pay back interest in cash at the rate of
4% per annum provided in the plan and the fact that in the course of the
negotiations the Panamanian plan has in certain ways been bettered to the
benefit of the bondholders, the Council feels that it is to the interest of the
bondholders to accept the plan offered and recommends that they do so.
Bondholders wishing to accept the plan should apply to the Bank of the
Manhattan Company, 40 Wall Street, New York, N. V., for a copy of the
prospectus and the letter of transmittal to accompany the deposit of their
bonds. The Council calls the bondholders' attention to the reference in the
Prospectus to litigation commenced on April 2nd. The Council is not in a
position to advise bondholders in regard to the merits of this litigation.
"The Council in the past has asked bondholders to make a voluntary contribution of ysth of 1% of the face value of the bonds held by them (that is,
at the rate of $1.25 for each $1,000 bond) as a contribution by the holders of
the bonds for the support of the Council in considerationof work already done
by the Council for the bondholders. The response from the great majority of
American bondholders has been most satisfactory but many foreign holders
of dollar bonds and arbitrageurs have been eager to accept the benefits of the
settlements without contributing to the work of the Council which made such
benefits available to them. In view of this situation the Council has felt that
the allocation evenly and equitably among all the bondholders accepting the
benefits of the Council's efforts and the avoidance of the unfairness involved
in permitting these costs to fall only upon those bondholders who voluntarily
contribute payments couldbest be obtained by having incorporated in the offer
the deduction from the first payment provided in the plan. The Council suggested this change to the Board of Visitors of the Council, composed of a
member appointed by the Secretary of State of the United States and a member appointed by the Chairman of the Securities and Exchange Commission.
The Board of Visitors in its report dated June 29, 1939, to the Secretary of
State and to the Chairman of the Securities and Exchange Commission, stated
that under all the circumstances it concluded to interpose no objection to the
Council's proposal. This policy has, therefore, been adopted by the Council
and is included in the present offer."
Since the partial payment of $22.06 for the December 1, 1936 coupon, no
payments havebeen made on the Municipal bonds.
Bonds of the "A" and "B" issues of the National Bank of Panama have
received no payments in the U. S. since default.
ational Bank of Panama "C"
ational Bank of Panama "D"
1928
1929
4%
1948
now
1949
now 4%
Total
Includes $2,000 held by National Bank of Panama as of June 30, 1939
$ 179,000
B 193,000
B 372,000*
56
PERU
Dollar Bonds
8,728,000
1927
1959
7% 15,000,000 48,383,000
1960
1927
6% 50,000,000
24,469,500
1928
1961
6% 25,000,000
National
Republic of Peru
Republic of Peru
Republic of Peru
Provincial
Callao
1927
1944
7^%
1,500,000
1,189,000
1928
1958
6J4%
3,000,000
2,887,000
Municipal
Lima
National
Provincial
Municipal
Issued
Outstanding
90,000,000
1,500,000
3,000,000
81,580,500
1,189,000
2,887,000
94,500,000
85,656,500
Interest and sinking
fund were defaulted in 1931 and 1932. Service on most
of the sterling bonds was also defaulted during the same period. Some service
was met on the Sterling Guano Loan, which was offered a permanent readjustment plan by the Minister of Finance on October 20, 1938.
The Peruvian Government made no effort during the year to serve its dollar bonds. The Council confidently hopes that the new Government, which
took office in December 1939, will shortly take up negotiations for the resumption of service ona fair and equitable basis for the dollar bonds.
3,709,700
£
POLAND
National
Poland
Poland (Assented)
Poland
Poland (Assented)
Poland Stabilization
Poland Stabilization
Dollar Bonds
1940
1920
6%
1958
4^4%
1925
1950
8%
4}4%*
1963
1927
1947
7%
(Regular Tranche)
(Special Tranche)
Poland Funding
(Stabilization)
Provincial
Silesia
Silesia (Assented)
Outstanding
4,097,950
7,980,250
1,557,300
5,480,200
1,023,000
12,103,100
29,340,943
1930
1968
1965
1936
1936
1956
1956
1937
1956
4^% [13,456,300]
4^%** 32,400,000
3% ) */|1W
« c« 'mo
iyy
3% ]
3,808,350
3%
1928
1958
1958
7%
4*4%
11,200,000
[ 3,537,400]
428,300
2,937,400
1928
1958
1958
7%
4J4%
10,000,000
[3,826,600]
415,100
3,227,200
(Assented)
Poland (Match)
Poland Funding
Issued
23,075,750
[12,689,400]
35,000,000
[7,676,600]
62,000,000
(173,900§
I
3,600§
256,300§
j-vi'iifiici'tyQ'l
Warsaw
Warsaw (Assented)
Figures in brackets not
included in totals.
as 4.725% per $1000 bond.
6^%.
Excludes fractional certificates and separate coupons.
at 105%
**♥Computed
Formerly
§
57
Guarantee)
Land Mortgage Bank of
...
...
National Economic
...
National
Bank
Warsaw
National Economic Bank
National Economic Bank
Bank
Economic
(Assented)
Outstanding
1924
1941
1925
1926
1930
1946
1947
1966
National
Provincial
Municipal
8%
3%t
3%$
7%
4^%
5,000,000
9,714,000
2,750,000
867,000
300,000
5,637,000
1,882,000
7,000
[818,000]
811,000
Issued
Outstanding
163,437,299
11,200,000
10,000,000
18,331,000
62,016,543
3,365,700
3,642,300
8,637,000
202,968,299
77,661,543ft
Defaults occurred on the dollar bonds in 1936 and 1937. Under
temporary
plans holders were offered cash payments amounting to 35% of the face
amount of the coupons coming due from the time of default to September 30,
1937, and at the rate of 4^4% per annum thereafter to April 30, 1938, with
the alternative in each instance of receiving 3% funding bonds for the full
face amount of the coupons. Permanent adjustment plans called for the payment of interest at the rate of 4^2% per annum and for the extension of the
maturities on some issues.
On the six issues of Polish dollar bonds concerning which the Council negotiated permanent adjustments in 1938, more than 78% were presented to the
Fiscal Agents by the end of 1939 for stamping to indicate assent to the plan
reducing interest as outlined above.
Interest payments were made on the stamped bonds at the 4^% rate up
to the time of the German occupation of Poland in September 1939, and even
after that date payments were made on the 7% Stabilization Loan bonds and
the 3% Funding bonds. The Fiscal Agents on some other loans reported,
however, that they were without sufficient funds to meet all the payments
under the temporary offers on those bonds which were presented after September 1, 1939.
Shortly after the Polish Government had transferred its seat to France in
the autumn of 1939, it contemplated issuing Funding Bonds in lieu of interest
payments beginning October 1, 1939. However, finding that the cost of such
an arrangement under existing conditions, would be prohibitive, the Polish
Government dropped that plan and on January 3, 1940 announced that, having
no other alternative at the present, they were compelled to give notice that
payment on their bonds would be suspended for the duration of the war.
The announcement stated that Poland recognized the title of the foreign holders to the full amount of the principal of their Polish bonds and that, upon
the terminationof the war, it was their intention to negotiate with the Foreign
Bondholders Protective Council concerning the dollar bonds.
Figures in brackets not included in totals,
% Formerly 7%.
t Formerly 8%.
tt In addition there are the following outstanding corporate dollar
Guarantee :
Industrial Credit Co. of Warsaw
K. Scheibler and E. Grohman
Poznan Land Credit Society
State Road Fund
Silesian American
Corporation
bonds without Government
1,011,914
1,000,000
575,000
189,586
2,510,500
5,287,000
58
FOREIGN BONDHOLDERS PROTECTIVE COUNCIL,INC.
The Council issued the following statement to the holders of Polish Dollar
Bonds on January 3, 1940:
"The Financial Counselor of the Polish Embassy has today issued a statement to the holders of the Polish dollar bonds, a copy of which is attached
hereto for the bondholders' information. The Council feels confident that the
American holders of these bonds will view with the greatest sympathy the
present difficult position of the Polish Government and will understand the
straightforward statement which it has made regarding future service on its
bonds. The Council recommends that bondholders follow the suggestion of
the Polish Government that they retain their coupons pending the outcome
of the war.
"For the information of the holders of the dollar bonds of Poland, the
Council has no hesitation in saying that in its negotiations in the past regarding service on the Polish bonds, it has invariably found the Polish Government taking a highly moraland honorable position and that it has throughout shown sedulous care for its credit.
"The Council would point out that the Polish Government did not take
unilateral action in cutting down service on their bonds. That Government
throughout has shown the will to pay which is a very essential factor in the
credit of a nation. Poland offered the bondholders a temporary plan for reduced interest, in the first instance, after setting forth to the Council its
financial difficulties and the imperious necessity under which the Government
found itself, surrounded by neighbors who were rapidly increasing their armaments, to take steps for the protection of the country. To do this the exchange position of Poland did not permit full service on the bonds. Of her
own accord, Poland bettered that offer a few months later, when she found
herself in a position to do so, and, after further negotiations with the Council,
this was followed shortly by an offer of a fair and equitable permanent settlement.
"The assets that were used to serve these bonds having now passed out of
the control of the Polish Government, it has been obliged to stop payment on
its bonds. The Polish Government, however, has done what it can in the
circumstances by recognizing the title of foreign bondholders to the full principal amount of the Polish bonds held by them, and by confirming as valid and
binding the readjustment plans of 1938. The Governmenthas alsoannounced
its firm intention, in agreement with Foreign Bondholders Protective Council,
Inc. as regards the publicly issued bonds, upon the termination of hostilities
to concert plans for the resumption of the payments which are due at present
or may become due in the future, under the existing readjustment plans, and
which payments have been interrupted because of the existence of the force
majeure."
Statement January 3, 1940 of the Minister of Finance of the Republic of
Poland follows:
"The war, which began on September Ist, 1939 and the subsequent invasion
of Poland has prevented the normal functioning of the Government of the
Republic of Poland on its territory, upsetting at the same time the loan
service operations. Consequently, owing to force majeure, the clauses contained in the loan agreements, providing for uninterrupted service during the
time of peace and war, became impossible of fulfillment.
"In order to give all holders equal treatment, the Polish Government, now
in Angers, France, contemplated the issuance of funding bonds in lieu of
interest payments due beginning October Ist, 1939. Such intention was communicated to the Foreign Bondholders Protective Council, Inc. and to various
Fiscal Agents. Upon closer investigation, however, it was found that the cost
59
of preparation of such arrangement, including the cost of registration in
compliance with the existing American laws, and all other expenses connected
with the execution of such a plan, would, in the present war conditions, be
prohibitive and, accordingly, such plan was dropped. However, despite the
best intentions on its part, the Polish Government, having no other alternative
at present, is compelled to give notice that the payment of interest and sinking
fund on all Polish loans must be suspended for the duration of the war,
beginning with the following coupons:
1. Republic of Poland Twenty Year 6% U. S. Dollar Gold Bond Loan
of 1920, 4y2 Per Cent Assented Sinking Fund External Bonds due
1958— Coupon due October Ist, 1939.
2. Republic of Poland 8% External Sinking Fund Gold Dollar Bond
Loan of —1925, 4y2 Percent Assented External Sinking Fund Bonds
Due 1963 Coupon due January Ist, 1940.
*3. Republic of Poland 7% Stabilization Loan of 1927,
— 4y2 Per Cent.
Assented External Sinking Fund Bonds Due 1968 Coupon due October 15th, 1940.
of Poland 41/i%4 l/i% ExternalSecured Sinking Fund Dollar Bond
Republic
4.
—
Loan Due October Ist, 1965 Coupon due October Ist, 1939.
—
5. 4J4% Republic of Poland Treasury Notes Dated December 22, 1937
Interest due October Ist, 1939.
6. Republic of Poland 3% Dollar
— Funding Bonds, Dated October 1, 1936
and Due October 1, 1956 Coupon due October Ist, 1940.
7. Republic of Poland 3% Dollar Funding Bonds Stabilization Loan
Series Due 1956— Coupon due April 15th, 1940.
8. 7% City of Warsaw Gold Bond Loan
— of 1928, 4^4% Assented Sinking
Fund External Bonds, Due 1958 Coupon due February Ist, 1940.
9. 7% Province of Silesia External Gold Bond Loan of 1928, 4^4% Assented Sinking Fund External Bonds, Due 1958 Coupon due December Ist, 1939.
10. Guaranteed and Municipally Secured 8% Sinking Fund Gold Bonds
of The National Economic Bank, Poland, 1925. Due January
— 1, 1946.
(Extended to January 1, 1967. Present interest rate 3%) Coupon due
January Ist, 1940.
11. National Economic Bank, Poland, Guaranteed and Secured 8% Sinking Fund Gold Bonds, 1926. Due October
— 1, 1947. (Extended to
January 1, 1967. Present interest rate 3%) Coupon due January Ist,
—
1940.
12. National Economic Bank 7% Mortgage Gold Bond Loan (II Issue
P.Z./l) of 1928. (Present interest rate 4^4%)— Coupon due December
31st, 1939.
13. Land Mortgage Bank of Warsaw Guaranteed First Mortgage 8%
Loan of 1924. (Present interest rate 4y2%o)— Coupon due December
22nd, 1939.
* Whereas in all
loans the service funds are to be placed in the hands of the Fiscal
Polish
Agents not later than ten days prior to the interest payment date, the loan agreement in regard
to the 7% Stabilization Loan of 1927 provides that the service funds should be placed in the
hands of the Fiscal Agents forty-five days prior to the interest payment date. Accordingly, on
September Ist, 1939, the Fiscal Agents held outside of Poland funds for the payment of the
interest coupon due October 15th, 1939. The payment of the interest coupon due April 15, 1940,
will be made out of funds similarly held by the Fiscal Agents outside of Poland and outside of
any control of the Polish Government prior to September 1, 1939.
60
"In consequence, the Polish Government suggests that the holders of the
coupons from all loans retain their coupons pending the outcome of the war.
"The Government of the Republic of Poland acknowledges with deep
appreciation all that the holders of their securities did in the readjustment of
the foreign indebtedness on what was believed in 1938 to be a permanent basis,
fair to creditors and Government alike, and upon which the Polish nation
could discharge its obligation towards the foreign bondholders. Those readjustments, as well as all rights to such readjustments of bondholders who,
up to the present time, have not presented their bonds for stamping, the
Polish Government confirms as valid and binding, all in accordance with the
respective laws duly provided by the Republic of Poland.
"The Polish Government further confirms that it recognizes the title of
foreign holders to the full principal amount of Polish bonds, so held by them
and states that it is its firm intention, in agreement with the Foreign Bondholders Protective Council, Inc., as regards the publicly issued bonds, and the
representativesof the holders with respect to the privately issued bonds, upon
termination of hostilities, to concert plans for the resumption of the payments
due at present or that may become due in the future under the existing readjustment plans, and which payments have been interrupted because of existence of the force majeure."
45,158,000
179,996,500
Vanes
ire
ROUMANIA
National
Kingdom of Roumania
Guaranteed)
Monopolies Institute
Dollar Bonds
Issued
Outstanding
1922
1968
4%
$26,980,050
$25,498,750*
1929
1959
7%
69,000,000
62,895,600f
$95,980,050
$88,394,350
Interest was defaulted on the 4% issue on October 1, 1933, and on the 7%
issue on February 1, 1934. Since October 1935 partial payments have been
offered only on such of the 4% bonds as were stamped to indicate British
ownership. On the 7% Monopolies Institute bonds partial payments were
offered through February 1, 1937 to American holders of the dollar tranche
offered in the United States, while holders abroad have continued to receive
partialpayments through February 1, 1940.
The Roumanian Government continues in complete default on the dollar
bonds. Negotiations with that Government have not yet resulted in the resumption of service on those bonds. The Council will hope that this situation
will change for the better during the course of the year.
* Reported that
$18,000 and £9,000 only in American hands.
t Reported that of the $7,500,000 issued in the U. S., approximately $3,500,000 are presently
outstanding here.
61
17,393,855
2,756,468,120
23,691,800
25,000,000
£
Francs
Lire
Swiss Francs
Outstanding IndebtednessOwed to the U.S. Government
RUSSIA
Dollar Bonds
Issued Outstanding
Imperial Russian Government 1916
1919
6J4% 50,000,000 50,000,000
Imperial Russian Government 1916
25,000,000
25,000,000
1921 5y2%
75,000,000
75,000,000
No payments have been made on these bonds since the time of default in
1919.
In a Joint Statement by the President of the United States and Mr. Litvinoff on November 16, 1933, announcement was made that in addition to
the agreements which were signed that day when recognition was granted by
the United States to the Soviet Republic, that there had taken place an exchange of views with regard to methods of settling all outstanding questions of
indebtedness and claims which permitted them to hope for a speedy and satisfactory solution of these questions which both Governments desired to have
out of the way so soon as possible. On September 6, 1934 an announcement
was made by the Acting Secretary of State that it was not possible to be
optimistic that any agreement wouldbe reached, and on January 31, 1935 the
Secretary of State made the further announcement that the proposal of the
United States had been rejected, and that in view of the present attitude of
the Soviet Government he felt they could not encourage the hope that any
agreement wouldbe possible.
By a Joint Resolution of Congress (H. J. No. 315), approved by the President August 4, 1939, provision was made for the appointment of a Commissioner to adjudicate the claims of American nationals against the Soviet Government. However, it is understood that, no funds having yet been appropriated for that purpose, the Commissionerhas not yet been appointed.
26,601,311
6,160,014,500
995,490,680
5,320,000
168,235,500*
£
Francs
Marks
Guilders
Gold Rubles
Outstanding Indebtedness Owed to
$395,002,244.52, principal and interest, as
* Equivalent
the U. S. Government
of December 31, 1939, which is in default.
to Francs 577,750,000, amount issued.
62
URUGUAY
National
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
Uruguay
...
Readjustment ...
Readjustment ...
Conversion
Readjustment
Dollar Bonds
1916
1952
5%
1937
1984
3%%
1921
1937
1926
1930
1937
1937
Conversion Scrip 1937
Conversion
1937
Conversion Scrip 1937
Municipal
City of Montevideo
City of Montevideo
1922
1926
Issued
Outstanding
[1,505,000]
1,248,000
[7,500,000]
1946
8%
6,860,500
1978 4-4}4-4*4%
[30,000,000]
1960
6%
[17,581,000]
1964
6%
1979 334-4-4*4% 44,839,000
2,008,100
1979 3%-4-4^%
326,673
1979 3^4-4-4^%
1978 3/^-4^-4^% 2,855,400
499,695
1978 3j/&-4y8 -4&%
462,000
737,000
476,000
6,184,000
1,119,000
483,000
42,127,500
1,441,500
6,178
1,611,900
[6,000,000]
[5,171,000]
889,000
402,000
7%
6%
1952
1959
Outstanding
Issued
58,637,368
National
Municipal
525
f
58,637,368
54,648,603
1,291,000
55,939,603
On September 1, 1937 holders of Republic of Uruguay 5%, 8% and 6%
dollar bonds were offered Readjustment Bonds (p. 726 Council's 1937 Report). This offer expired December 31, 1938 but was extended to June 30,
1939. It was reopened on December 19, 1939 and extended to June 29, 1940.
Holders of Montevideo 7% and 6% dollar bonds were offered on August
1, 1938 Conversion Bonds of the Republic of Uruguay (p. 1029 Council's 1938
Report). This offer expired June 30, 1939, but was reopened on March 20,
1940 and extended to August 31, 1940.
It has been estimated that, at the end of 1939 about one-fourth of the
external debt was held in Uruguay.
From the table below it will be noted that at December 31, 1939 approximately 95% of the dollar bonds of the Republic and 67% of the dollar bonds
of the City of Montevideo had been exchanged under the offers. 93% of all
the dollar bonds had, at that date, accepted the Plans of Readjustment.
Outstanding when
Readjustment or
Exchanged to
Dec. 31, 1939
Conversion Offered for NewBonds
Uruguay
Uruguay
Uruguay
Uruguay
5% 1952
8% 1946
6% 1960
6% 1964
Montevideo 7% 1952
Montevideo 6% 1959
1,248,000
6,860,500
27,694,500
17,144,500
2,307,500
1,697,000
786,000
6,384,500
26,575,500
16,661,500
1,418,500
1,277,000
63%
93%
96%
97%
62%
75%
56,952,000
53,103,000
93%
14,794,248
117,625,467
£
Francs
t Conversion Bonds of
Uruguay
issued for
municipal bonds in 1938.
63
Dollar Bonds
National
Yugoslavia
Yugoslavia (Series B)
Yugoslavia (Funding)
Yugoslavia (Funding, 2d series)
........
1922
1962
8%
1922
1962
7%
1932
1956
5%
1956
1936
5%
guarantee)
Mortgage Bank, Yugoslavia.... 1927
Mortgage Bank, Yugoslavia
(Funding)
1933
Mortgage Bank, Yugoslavia
(Funding, 2nd Series)
1936
National
Issued
Outstanding
15,250,000
30,000,000
4,625,936
2,380,923
14,307,200*
27,890,500*
3,237,905
2,086,555
12,000,000
8,507,000*
1956
7%
5%
1956
5%
Issued
Outstanding
..
52,256,859
13,943,416
47,522.160
9,501,434
66,200,275
57,023,594*
1957
1,597,956f
715,561
345,460t
278,873
The dollar bonds of the Kingdom and the Mortgage Bank defaulted on
interest in November and October of 1932 respectively. Partial cash and
funding bonds have been offered for interest through the first half of 1937,
and a cash payment of 45% of the face amount of the coupons due thereafter
through the first half of 1939.
On the funding bonds interest is continuing to be paid at the full 5% rate.
On October 16, 1939 the Council received a letter dated September 29,
1939, advising of the suspension of payments on the dollar bonds of the
Kingdom and the Mortgage Bank, and on October 20, 1939 the Council
issued the following statement:
"The Council has been advised by the Director General of the Ministry of
Finance of the Kingdom of Yugoslavia that on account of the present serious
difficulties which have reduced to minimal proportions the possibility of providing the necessary exchange for the settlement of foreign obligations, and
creating besides insurmountable transfer difficulties, the Government of Yugoslavia has been obliged to take an important decision regarding the service
of its foreign public debt. The Director General stated that the following
are the principal provisions of this decision:
" 'Until
new decision of the Ministry of Finance all transfers are suspended
for the service of the coupons and the amortization of the loans and credits
of the State and those guaranteed by the State;
"
'That the transfers willbe continued for the regular service of the coupons
of the funding bonds issued by the State, or enjoying its guarantee;
" 'That for
the loans, issued by the State or enjoying its guarantee, who
benefit from the transfer moratorium, there will be paid into the National
Bank in dinars to a special blocked account the counter-value of the coupons
in foreign money, calculated at the official rate of exchange for each coupon,
it being understood that
" the possibility of utilizing these dinars will be
regulated subsequently.'
* Of these
3 issues $17,998,600, more than 31%, have been nationalized.
t Amount authorized.
64
£
Francs
Gold Francs
Swiss Francs
152,500
1,424,606,000
537,387,960
9,568,000
TABLES
I. Dollar Bonds Outstandingand in Default.
11. Status of Service on Outstanding Dollar Bonds.
111. Interest Payments on OutstandingDollar Bonds.
IV. Summary of Bonds as to Amounts Issued, Outstanding, and Defaults Grouped According to Areas and
Issuers.
65
66
I. SCHEDULE OF OUTSTANDING FOREIGN DOLLAR
ISSUED AND/OR GUARANTEED BY GOVERNMENTS
PRINCIPAL AMOUNTS OUTSTANDING
Countries
Argentina
Bolivia
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Mexico
Panama
Peru
Uruguay
Total Latin America
Belgium
Bulgaria
Czechoslovakia
Danzig
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
Lithuania
Norway
Poland
Roumania
Russia
Yugoslavia
Total Europe
Australia
China
Japan
Liberia
Total Far East and Africa.
Canada
*
Grand Total
t
— — Tootal
Outstanding
>
> i
National
*In Default Outstanding *InDefault
230,676,290
16,667,490 149,373,500
60,610,975
60,610,975
60,610,975
356,307,745
356,307,745 168,771,745
176,424,000
176,424,000 154,833,000
145,891,205 143,649,900
53,464,805
8,112,520
8,112,520
8,112,520
a
118,744,700
36,814,900 118,744,700
15,250,000
15,250,000
12,262,700
12,262,700
459,900
12,081,525
12,081,525
12,081,525
2,797,100
1,345,100
2,797,100
7,974,992
7,974,992
7,974,992
303,832,453
303,832,453
265,988,316
17,769,486
17,769,486
15,950,486
85,656,500
85,656,500
81,580,500
55,939,603
3,831,000
54,648,603
1,610,331,794 1,243,341,286 1,170,642,667
96,302,400
16,634,500
4,288,800
4,429,385
129,441,000
3,339,500
14,786,000
88,267,100"
517,786,800
36,044,500
36,926,600
859,500
103,413,800
4,700,694
112,367,000
77,661,543
88,394,350
75,000,000
57,023.594
1,467,767,066
246,185.000
11,422,085
311,332,200
1,512,000
570,451,285
16,634,500
4,288,800
4,429,385
492,238,900
26,942,500
30,496,200
65,124,643
88,394,350
75,000,000
50,704,700
854,253,978
10,400,000"
10,400,000
86,602,400
16,634,500
3,682,800
4,429,385
92,842,000
3,339,500
4,002,000
88,267,100"
316,279,300 c
36,044,500
6,578,600
859,500
66,174,400
4,700,694
94,494,000
62,016,543
25,498,750
75,000,000
47,522,160
1,034,968,132
153,105,000
11,422,085
165,931,200
1,512.000
331,970,285
60,610,975
168,771,745
154,833,000
51,223,500
8,112,520
36,814,900a
459,900
12,081,525
1,345,100
7,974,992
265,988,316
15,950,486
81,580,500
2,540,000
868,287,459
16,634,500
3,682,800
4,429,385
290,731,400°
26,942,500
148,200
49,479,643
25,498,750
75,000,000
42,197,700
534,744,878
10,400,000d
10,400,000
1,904,967,061
93,468,224 469,000,000
5,553,517,206 2,201,463,488 3,006,581,084 1,413,432,337
Covers defaults as to interest and/or sinking fund, and includes funding bonds.
a. $34,590,900 in arrears on sinking fund and $2,224,000 in default on both interest and sinking
fund.
b. Of this amount 82% are stamped to indicate French ownership.
c. Includes Conversion Office 3% Funding Bonds, also $119,611,600 Match Loan Bonds.
d. Excludes non-interest scrip of $1,022,085.
67
BONDS (PUBLICLY AND NON-PUBLICLY OFFERED)
OR POLITICAL SUBDIVISIONS THEREOF
AS OF DECEMBER 31, 1939
i
State,Provincial or
Departmental
Outstanding
75,080,290
\
*InDefault
>
MimicipaI
i
Outstanding
10,444,990
6,222,500
132,539,666 132,539,666
59,988,666 59,988,666
54,997,000
8,145,500
22,149,900
3,252,666
i,'i89,666
3,252,666
i,"i89,666
371,500
2,887,000
272,048,290
207,412,990
1,291,000
97),064,400
9,700,000
'
*InDefault
6,222,500
54,997,000
8,145,500
22,149,900
371,500
2,887,000
1,291,000
96,064,400
»
Corporate
(Gvt.Guaranteed)
*InDefault
Outstanding
1
13,445,566
13,445,566
1i,802,866
11,802,866
34,592,137
1,447,500
34,592,i37
71,576,437
71,576,437
10,288,500
10,288,500
1,447,500
'
3,365,700
A.'.'.'.'.'.
'606,666
3i,980',666
6,850,666
62,996,666
36,348,666
33,195,466
5,927,666
3,365,700
3,642,300
3,642,300
5,046,000
8,637,000
62,895,600
9,501,434
8,5*0*7,666
80,269,200
73,269,200
185,244,700
97,592,300
167,285,034
148,647,600
69,903,566
7,066,666
69,903,566
26,072,000
60,056,000
29,204,666
1,079,384.090
!*!"!"!!
...A.'.'.
62,996,666
79,944,000
360,626,190
224,540,464
561,125,564
" "
! ; :;
'. '. '. '. '. '. '. '.
4,619,666
3,934,666
68,608,666
68,608,666
4,044,666
'.'.!!!'.!!
8,637,000
62,895,600
30,348,666
!'.!'.'.!'.'.
A.'.'.'.'.'.
........
55,276,000
60,056,000
667.010.600
606,666
6,952,000
116,1*97,666
'.'.'.'.'.A.
123,149,000
497,260
194,153,960
544.415,997
906,426,468
13,026,964
233,251,001
fig
11. STATUS OF SERVICE (INTEREST, SINKING FUND AND
(PUBLICLY AND NON-PUBLICLY OFFERED)
MENTS OR POLITICAL SUBDIVISIONS
,
»
PrincipalAmount
Receiving
Argentina
Bolivia
Outstanding
FullService
230,676,290
214,008,800
60,610,975
bSS
Kile
coiombia'::::::::::.:
176424,000
C°ba
118 744 700
356307745
W?i«5
14
8,112,520
Costa Rira
Dominican' Republic' .'..'A.....
Ecuador
FI Salvador
Guatemala.::::::::::::::::::::::::.::....
iSf
""
MpYiVn
Panama
Pe"
Uruguay'::::::::::::::::::::::::::
Total Latin America
Belgium
Bulgaria
....
15,250,000
122M,7QQ
12,081,525
2 797100
7:974:992
303,832,453
17,769,486
85,656,500
55,939,603
1,610,331,794
?6,302,400
JSoSk
Denmark
129,441,000
Ff„fand
14,786,000
88267,100
517,786,800
36 044,500
36,926,600
859,500
103,413,800
4,700,694
112,467,000
77,661,543
88,394,350
75,000,000
57,023,594
3339500
Estoma
Franc"
Germany
GreS
HunSrv
gXnd
{ST
Nnrwav '
.'.'!.'.'.'."
Poknd
Roumania "A.
"
Russia
Yugoslavia'
Total Europe
Australia
China ' '"
Tarjan
Liberia
"A...
Total Far East and Africa
Canada
Grand Total
*
k
81,929,800b
15,250,000
1,452,000
52,108,603
366,990,508
96,302,400
16,634,500
Czechoslovakia
Lithuania
"
2 41,3052'241,305
1,467,767,066
246,185,000
11,422,085
311,332,200
1,512,000
570,451,285
1,904,967,061
5,553,517,206
129,441,000
3,339,500
14,786,000
88,267,100
25,547,900
9,102,000*
6,430,400
859,500
103,413,800
4,700,694
112,467,000
12,536,900
6,318,894
613,513,088
246,185,000
311,332,200
1,512,000
559,029,200
1,811,498,837
3,351,031,633
Some of these are serial maturities for which various offers have been made, others are past due
and unpaidbond maturities. None were paid in dollars according to contract when due.
a. Excludes stamped bonds which have no maturity.
b. Service in full for 1939 but sinking fund one year in arrears since 1934.
c. Includes non-interest scrip of $28,100.
d. Includes receipts for interest in arrears. Cash Warrants and Scrip.
c. Full service at reduced rate under Readjustment plan.
f. Incomplete as to maturities on 3 serial issues. This figure excludes maturities exchanged for
unmatured bonds, RM, or held as claims.
g. Excludes non-interest scrip of $1,022,085.
69
PRINCIPAL) ON OUTSTANDING FOREIGN DOLLAR BONDS
ISSUED AND/OR GUARANTEED BY GOVERNTHEREOF AS OF DECEMBER 31, 1939
—
InDefault as to
Interest and/or
Sinking Fund
Principal Amount
InDefault as to
both Interestand
Sinking Fund
16,667,490
60,610,975
356,307,745
176,424,000
143,649,900
8,112,520
36,814,900
12,444,990
59,422,000
356,307,745
176,424,000
143,649,900
8,112,520
2,224,000
12,262,700
12,081,525
1,345,100°
7,974,992
303,832,453
17,769,486
85,656,500
3,831,000
1,243,341,286
12,262,700
12,081,525
1,345,100°
303,832,453d
14,166,486
85,656,500
3,831,000
1,191,760,919
16,634,500
4,288,800
4,429,385
16,634,500
606,000
4,429,385
492,238,900
26,942,500
30,496,200
492,238,900
26,942,500
30,496,200
65,124,643
88,394,350
75,000,000
50,704,700
854,253,978
65,124,643
88,394,350
75,000,000
10,400,666g
10,400,000
93,468,224
2,201,463,488
50,704,700
850,571,178
InDefault as to
Sinking FundOnly
4,222,500
1,188,975
Includedin Totals
1,220,000
5,835,666
1,609,000"
142,400
34,590,906
7,974,992
10,722,666
29,i66
3,603,666
49,530,264
51,580,367
69,087,764
3,682,800
9,670,566'
75,000,666
3,682,800
84,670,500
'
41
5,666
16,400,666s
10,400,000
93,468,224
2,146,200,321
—
InDefault as to
Principal No t
55,263,167
415,000
285,000
154,458,264
70
111. STATUS OF INTEREST SERVICE ON OUTSTANDING
OFFERED) ISSUED AND/OR GUARANTEED BY
THEREOF (BASED ON TREATMENT OF LAST
Total
Outstanding
230,676,290
60,610,975
356,307,745
176,424,000
145,891,205
8,112,520
118,744,700
15,250,000
12,262,700
12,081,525
2,797,100
7,974,992
303,832,453
17,769,486
85,656,500
55,939,603
1,610,331,794
Argentina
Bolivia
"
Brazil
Chile
Colombia
Costa Rica
Cuba
Dominican Republic
Ecuador
El Salvador
Guatemala
Haiti
Mexico
Panama
Peru
Uruguay
Total Latin America
Belgium
Bulgaria
Czechoslovakia
Danzig
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
Italy
...
Lithuania
Norway
Poland
Roumania
Russia
Yugoslavia
Total Europe
96,302,400
16,634,500
4,288,800
4,429,385
129,441,000
3,339,500
14,786,000
88,267,100
517,786,800
36,044,500
36,926,600
859,500
103,413,800
4,700,694
112,467,000
77,661,543
88,394,350
75,000,000
57,023,594
1,467,767,066
Australia
China
246,185,000
11,422,085
Liberia
1,512,000
570,451,285
Japan
Total Far East and Africa
Canada
Grand Total
1 While a partial cash payment was offered for certain coupons, no offers were
in 1939.
2
Includes non-interest scrip of $1,080,800.
8 Excludes non-interest scrip of $28,100.
4 Understood some partial
payments were made on certain British held bonds.
5 Excludes non-interest scrip of $1,022,085.
« Interest paid at 5% instead of 7% Jan. 1, 1935 to Dec. 31, 1942.
311.332.200
1,904,967,061
5,553,517,206
iade for interest due
71
FOREIGN DOLLAR BONDS (PUBLICLY AND NON-PUBLICLY
GOVERNMENTS OR POLITICAL SUBDIVISIONS
INTEREST COUPON MATURING IN 1939)
Full Cash
Interest
218,231,300
PrincipalAmounts Receiving
Partial Cash
Paymentin
Bond Payment
Payment Domestic Currency
Cash and Funding
.....A.
AAA.
i,1*88,975
2,241,365
116,520,766
::::::::
8412,526
::::::::
i,452,666
::::::::
1,316,666
::::::::
15,250,000
7,974,992
9,428,520
::::::::
1,188,975
16,634,566
6,318,894
617,195,888
3.831,000
1,182,304,299
606,666
4,429,385
::::::::
156,939,666
::::::::
65,'i24,643
26,942,500
30,348,000
4
::::::::
::::::::
289,988,643
246,185,000
341,299,966
148,266
'
88,394,350
75,000,000
50,704,700
560,582,535
16,406,6665
31i,332,266
1,512,0006
559,029,200
1,811,498,837
3,405,105,825
12,081,525
1,0003
'
129,441,666
3,339,500
14,786,000
88,267,100
25,547,900
9,102,000
6,430,400
859,500
103,413,800
4,700,694
112,467,000
12,536,900
2,224,666
12,262,7662
85,656,500
417,381,900
3,682,800
12,444,990
59,422,000
356,307,745
176,424,000!
143,649,900
303,832,453
14,166,486
3,603,666
52,108,603
96,302,400
No
Payment
10,400,000
93,255,964
392,673,127
1,188,975
212,260
1,753,499,094
72
IV. SUMMARY OF OUTSTANDING FOREIGN DOLLAR
BONDS (PUBLICLY AND NON-PUBLICLY OFFERED)
ISSUED AND/OR GUARANTEED BY GOVERNMENTS OR
POLITICAL SUBDIVISIONS THEREOF AS OF
DECEMBER 31, 1939
% inDefault
of Amount
In Default Outstanding
Outstanding
Issued
Principal Amount
.... $7,243,137,327
$5,553,517,206
$2,201,463,488
Grouping According to Areas
InDefault
Outstanding
Principal
No. of
Principal
No. of
Issues
Latin America
179
132
Amount
$1,610,331,794
Far East and Africa.. 29
736
1,467,767,066
570,451,285
1,904,967,061
1076
$5,553,517,206
Europe
Canada
Amount
Issues
153
88
$1,243,341,286
2
49
854,253,978
10,400,000
93,468,224
292
$2,201,463,488
39.6
%in
Defaidt
77.2
58.2
1.8
4.9
39.6
Grouping According toIssues
National
State, etc
Municipal
156
$3,006,581,084
593
192
...
Corporate (Govern135
ment Guarantee)
1076
$1,413,432,337
561,125,564
95
77
58
906,426,468
62
233,251,001
25.7
$5,553,517,206
292
$2,201,463,488
39.6
1,079,384,090
360,626,190
194,153,960
47.0
33.4
34.6
Note: The foregoing tables show the outstanding amounts of dollar bonds, publicly and
non-publicly offered, of foreign governments, foreign political subdivisions and foreign corporations directly guaranteed by a governmental body. A substantial part of these bonds are owned
by citizens of other countries. Therefore, these figures should not be interpreted as indicating
the amount of foreign bonds held by American investors or the amount of American foreign
investments.
TABLE OF
INDEBTEDNESS OF FOREIGN GOVERNMENTS
TO THE
GOVERNMENT OF THE UNITED STATES
73
74
OBLIGATIONS OF
Principal of the funded and unfunded indebtedness of foreign
interest thereon, and payments on account of
Total indebtedness
(paymentsonprincipal deducted)
$23,901,391.74
Armenia
457,552,820.78
Belgium
Cuba
Czechoslovakia
Estonia
Finland
France
165,788,588.45
21,321,017.05
8,142,890.21
4,200,332,646.54
Germany (Austrian indebtedness")2
Great Britain
Greece
Hungary
Italy
Latvia
Liberia
Lithuania
Nicaragua
Poland
Rumania
Russia
Yugoslavia
Germany :4: 4
Army costs (reichsmarks)
Awards of Mixed
Claims Commission
(reichsmarks)
....
Total (reichsmarks)
Total (in dollars at
40.33 cents to the
reichsmark)
1Payments
agreements.
of
....
_
Funded
Indebtedness
,
Total Payments
received
Principal (net)
$52,191,273.24
12,286,751.58
20,134,092.26
1,248,432.07
5,891,291.77
486,075,891.00
26,011,672.09
862,668.00
5,574,430,793.82 2,024,848,817.09
34,523,635.29
4,039,888.01
2,412,700.53
517,607.12
2,025,525,996.77 100,829,880.16
8,790,192.69
761,549.07
36,471.56
7,870,378.50
1,237,956.58
168,575.84
266,815,451.34
22,646,297.55
64,914,114.78
4,791,007.22
395,002,244.52
8,750,311.88
61,817,578.15
2,588,771.69
$400,680,000.00
Accrued interest
$56,872,820.7
165,241,108.90
16,466,012.87
8,042,466.77
3,863,650,000.00
547,479.5
4,855,004.1
100,423.44
336,682,646.54
25,980,480.66
4,368,000,000.00
31,516,000.00
1,908,560.00
2,004,900,000.00
6,879,464.20
31,191.43
1,206,430,793.82
3,007,635.29
504,140.53
20,625,996.77
1,910,728.49
6,197,682.00
1,672,696.50
206,057,000.00
63,860,560.43
60,758,451.34
1,053,554.35
61,625,000.00
192,578.15
$13,345,154,113.25 $2,749,907,533.69 $11,231,004,335.83 351,695,246,141.16
1,020,153,871.19
51,456,406.25
997,500,000.00
22,653,871.1
2,103,750,000.00
87,210,000.00
2,040,000,000.00
63,750,000.0
3,123,903,871.19
138,666,406.25
3,037,500,000.00
86,403,871.19
$33,587,809.69 $1,225,023,750.00
$34,846,681.25
$1,259,870,431.25
governments which have
funded their debts were made
prior to
the date of the
funding
a
The German Government has been notified that the Government of the United States will look to the
German Government for the discharge of this indebtedness of the Government of Austria to the Government
of the United States.
2
Source— Statement of the Public Debt of the United States, December 31, 1939— Form 774 1
75
FOREIGN GOVERNMENTS
governments to the United States, the accrued and unpaid
principal and interest, as of December 31, 1939.
indebtedness
Unfunded indebtedness
Payments on account
Principal
'
$i'7,i66,'0'00.66
'"19,829,914.i7
957,533.23
161,350,000.00
Interest
''
Indebtedness
Principal (net)
Accrued interest
$14,496,000.66 $11,959,917.49 $11,941,474.25
A.'A.'AAAA.
1,246,990.19
4,624,443.27
38,650,000.00
'"
Principal
$2,057,630.37 $18,543,642.87
202,181,641.56 357,896,657.11
2,922.67
1,159,153.34
364,319.28
26,000.00
1,287,297.37
2,700,000.00
19,316,775.96
141,950.36
'i',225,'o'o'6.66
:::::::::::::::
'''
29,061.46
2,286,751.58
304,178.09
1,441.88
309 315 27
64,689,588.i8 221,386302:82
V,66i,626.6i
'234,783.66
Interest
10,000,000.00
862,668.00
232,000,000.00 1,232,770,518.42
981,000.00
1,896,812.00
73,995.50
442,858.58
37,100,000.00
5,766,708.26
9,200.00
621,520.12
"
Payments onaccount^
'192,66i,297.37 202,466,947.i5
1,798,632.02
727,712.55
753.04
57,598,852.62
130,828.95
10,471.56
1,546.97
26,625.48
2,048,224.28
263,313.74
8,750,311.88
636,059.14
$475,711,391.27 $1,320,851,314.81 $204,561,214.86 $214,342,421.40 $281,990,396.99 $671,354,430.62
50,600,000.00
856,406.25
81,600,000.00
5,610,000.00
132,200,000.00
6,466,406.25
$31,539,595.84
$2,048,213.85
3Includes balances of
amounts postponed under provisions of joint resolution of Dec 21
amounts
* postponed, see p. 35 of Annual Report of the Secretary of the Treasury
for 1932 )'
Indebtedness to the United States under agreements of June 23, 1930 and May
26, 1932.
IQII
(CF^
Treasury Department. Further details may be found in Council's 1938 Report, p. 1139-44.
76
1939 TRADE WITH THE WORLD OF THOSE
Latin America
tArgentina
*Bolivia
Brazil
Local
'Currency
Equivalent
inU. S. Cy.
Peso
32.85<f
3.09*
$60.02
5.17*2
57.06*
17.79*
Boliviano
Conto
Peso(6d)
Peso
*Chile
*Colombia
Costa Rica
Colon
Peso
Cuba
Dominican Republic
*Ecuador
El Salvador
Guatemala
Haiti
Dollar
Sucre
Colon
Quetzal
Gourde
Peso
fMexico
Panama
f Peru
Balboa
Sol
*Uruguay
Peso
Europe
Belgium
Bulgaria
Lev
Franc
Czechoslovakia
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Krona
Krone
Kroon
Markka
Franc
Reichsmark
Drachma
Pengo
Pound
Ireland
Italy
Lithuania
Norway
Poland including Danzig
Roumania
Russia
Lira
Lit
Krone
Zloty
Leu
Ruble
Yugoslavia
Dinar
Australia
China
English Pound
Liberia
Canada
Dollar
Canadian Dollar
Yuan
Yen
Japan
$1.00
$1.00
6.74*
40.00*
$1.00
20.00*
19.30*
$1.00
18.76*
62.01*
3.37$
1.21*
3.43*
20.35*
23.98*
1.99*
2.51*
40.06*
0.82*
19.24*
$4.43
5.20*
16.73*
23.23*
18.84*
0.71*
20.00*
2.27*
$4.74
11.88*
25.96*
$1.00
96.02*
* Includes gold.
t Includes
gold and silver.
1Dollar equivalent as given in Brazilian statistics.
2Foreign trade statistics reported in gold peso of
6d; conversion at the rate of 20.61 U. b. cents
per goldpeso.
aForeign trade statistics given in dollars in official Costa Rican publications.
77
COUNTRIES HAVING DOLLAR BONDS OUTSTANDING
—
(In thousands 000 omitted)
Imports
Local
Exports
Local
Currency
Dollars
Currency
Dollars
1,338,332
66,402
4,984
410,8072
183,462
439,642
2,052
1,570,226
117,400
5,616
671,4092
177,054
515,819
3,628
1
26L012
84,667
104,683
16,8843
105,861
11,1024
9,965
8,850
15,296
8,180
121,534
20,464
47,986
40,532
105,861s
147,860
22,124
15,296
40,904
629,708
20,464
255,787
65,364
147,6763
164,841
31,849
16,985
36,338
914,390
6,826
381,421
101,366
62,857
316,354
143,617s
162,522
21,679,000
6,064,754
4,528,800 s
1,575,000
118,217
6,948,000 6
23,832,000 7
3,293,100s
9,200,000
604,990
26,902
5,957,000s
203,190
808,272
781,500s
26,809,349
730,582
78,384
154,885 s
320,513
27,391
140,3506
629,1657
1,320,533 s
73,600
116,400
119,176
313,338s
33,994
187,762
147,235 s
190,346
4,757,000
107,984
5,521,000
125,327
102,156
1,333,653
2,917,666
453,573
158,438
757,426
112,201
1,027,097
3,576,370
498,172
122,019
928,426
722,485
693,730
971,227
932,572
19,420,000
5,196,747
4,097,5005
1,742.000
101,351
6,663,0006
32,539,0007
3,172,400 5
12,275,000
490,510
43,497
6,084.000 5
169,360
1,361,835
762,300s
22,890,474
654,454
62,881
140,135s
354,497
24,304
134,5936
3053951
175,241
101,027
9,086s
147,676
18,643
11,110
12,740
16,985
7,268
176,477
6,826
71,555
859.13057
1,272,132
98,200
94,374
192,692
320,018s
(Not available)
(Notavailable)
28,334
+
Balance
— Export
Import Balance
Local
Currency
+ 231,894
+ 50,998
-t632
+
260,602
—
6,408
+ 41,815
+ 16,981
+ 9,725
+
1,689
_ 4,566
—+ 284,682
13,638
+ 125,634
+ 36,002
+2,259,000
+
868,007
431,300s
—+ 167,000
+ 16,866
+ 285,000
-8,707,000
+
120,700s
—3,075,000
+
- 114,480
16,595
— 127,000
s
+
33,830
6
7
553,563
4-
19,200s
+3,918,875
+ 764,000
+
10,045
- 306,556
+ 658,704
+ 248,742
* Yearly imports estimated on official figure of P. 5,551,000 covering first 6 months.
5 Cover first
7 months.
Cover first 10months.
Cover first 8 months.
See Council's 1938 Report for earlier trade figures.
6
7
Dollars
+
+
+
—+
—
+
+
+
+
+
+
+
+
—
+
+
76,177
1,576
44,553
90,574
3,656
7,798
41,815
7,541
1,145
3,890
1,689
912
54,943
13,638
23,569
22,325
76,128
10,503
14,750s
33,984
—+
4- 3,087
+
5,757
- 229,865
7
s
—+ 48,401
24,600
+ 22,026
6
—
+
73,516
6,680s
5,660
- 128,592
3,618s
27,824
+
+
+
17,345
+ 44,599
36,419
+ 171,000
+ 238,842
78
1939 TRADE WITH THE UNITED STATES OF THOSE
Latin America
fArgentina
*Bolivia
Local
iCurrency
, Peso
Boliviano
Conto
Brazil
Peso(6d)
Peso
*Chile
*Colombia
Costa Rica
Cuba
Dominican Republic
*Ecuador
El Salvador
Guatemala
Haiti
Colon
Peso
Gourde
20.00*
19.30*
$1.00
18.76*
62.01*
Panama
Uruguay
Peso
Sol
TotalLatin American
Europe
Belgium
Bulgaria
Franc
Lev
Krona
Czechoslovakia
Denmark
Estonia
Krone
Kroon
Finland
Markka
France
Franc
Reichsmark
Germany
Greece
Drachma
Pengo
Pound
Lira
Hungary
Ireland
Italy
Lithuania
,
Norway
Poland including Danzig
Roumania
Russia
,
Yugoslavia
Total European
Australia
China
Krone
Zloty
Leu
Ruble
Dinar
Yuan
Yen
Dollar
Liberia
Canada
Canadian Dollar
6.74*
40.00*
$1.00
3.37*
1.21*
3.45*
20.55*
23.98*
1.99*
2.51*
40.06*
0.82*
19.24*
$4.43
5.20*
16.73*
23.25*
18.84*
0.71*
20.00*
2.27*
$4.74
11.88*
25.96*
$1.00
96.02*
gold.
t Includes gold and silver.
1Foreign
Lit
English Pound
Japan
* Includes
,
$1,003
$1.00
Peso
Balboa
fPeru
32.85*
3.09*
5.17*1
57.06*
17.79*
$60.02
Dollar
Sucre
Colon
Quetzal
[Mexico
Equivalent
in U.S. Cy.
trade statistics reported in gold peso of 6d; conversion at the rate of 20.61 U. S. cent
per gold peso.
2 Foreign trade statistics given in dollars in official Costa Rican publications.
79
COUNTRIES HAVING DOLLAR BONDS OUTSTANDING
—
(In thousands 000 omitted)
Local
Currency
215,158
14,668
1,660
127.9281
102,088
78,381
4
*
71,950
8,574
25,464
384,900s
11,917
105,064
3,431
i
119,651
4
127,000
*
4
4
4
863,000
4
4
4
4
103,000
4
718,700
4
248,012
14,686
214,100
1.002,384
4
414,587
«
—+
Exports
Imports
Dollars
$ 70,679
453
86,917
26,366
58,251
9,9252
78,381
6,780
4,849
4,172
8,574
5,093
74,286s
11,917
19,710
2,128
468,481
$ 64,567
1,448
3,758
25,845
1,513
13,442
181,825
47,374
6,904
2,695
9,593
58,864
368
23,927
16,001
5,103
56,638
5,630
525,495
69,612
25,435
260,219
1,152
398,086
Local
Currency
Dollars
$ 61,555
355
187,383
10,778
2,049
204,791!
103,662
108,720
42,207
59,150
4,1432
107,020
5,824
5,456
6,957
10,725
2,502
152,573 s
2,991
21,736
8,714
580,406
107,020
4
80,947
4
10,725
12,511
685,872s
2,991
115,864
14,055
$ 65,296
2,491
4,033
4,274
1,544
20,664
62,375
52,447
15,928
4,223
1,672
39,921
4
205,885
4
21,000
4
4
4
4
1,991,000
4
4
4
499
4
16,493
11,495
1,948
25,023
6,373
334,699
71,000
4
274,300
4
280,736
15,650
225,873
641,509
74,181
26,833
166,536
2,137
372,588
4
388,052
..
....
ExportBalance
Import Balance
Local
— Currency
— 27,775
+ 3,890
389
+ 76,863
+ 1,574
+ 28,639
+ 8,997
2,151
—+ 12,953
s
—+ 300,972
8,926
+ 10,800
+ 10,622
+
—
*
86,232
4
106,000
4
4
4
4
+1,128,000
4
4
4
4
— 32,000
_ 444,400
+ 32,724
4
4
+ 964
11,773
—+ 360,875
— 26,555
4
— $Dollars
— 9,124
120
+ 21,803
+ 15,841
+ 899
+ 5,782
—+ 28,639
+ 956
607
+ 2,785
—+ 2,151
2,591
s
—+ 58,087
8,926
+ 2,026
+ 6,586
+ 111,925
—
$ 1,271
+ 1,043
275
—+ 21,571
+ 31
+
7,222
— 119,450
+ 5,073
+ 9,024
+
1,528
— 7,921
— 18,943
131
—+ 7,434
— 4,506
— 3,155
- 31,615
_ —+ 743
+
—+
+
—
190,796
4,569
1,398
93,683
985
25,498
Average rate in 1939, 93 U. S. cents. ,
not available.
*U. S. trade statistics; complete national statistics
estimated on official data of P 288,680,000 for imports and P 514,406,000 for exports
covering 9 months.
See Council's 1938 Report for earlier trade figures.
B Yearly trade
80
REPORT ON EXAMINATION OF CASH RECORDS
DECEMBER 31, 1939
February 9, 1940
Mr. Francis White, President,
Foreign Bondholders Protective Council, Inc.,
90 Broad Street, New York, N. Y.
Dear Sir :
In accordance with instructions we have made an examination of the books and
accounts of Foreign Bondholders Protective Council, Inc. for the year ending
December 31, 1939 and submit this report thereon.
CASH TRANSACTIONS
A summary of cash receipts and disbursements for the year ending December
31, 1939 is appended. This summary shows the receipts and disbursements of the
General Account and the Reserve Account; the allocation of the receipts to the
Reserve Account and transfers from the Reserve Account to the General Account
are as made by the management.
The footings of the cash book were proved and all postings to the general
ledger were checked.
Receipts :
Recorded cash receipts were agreed by totals with relative deposits as shown
on bank statements. Duplicate deposit slips for selected periods were obtained
direct from the depositary and the details appearing thereon were compared item
by item with the entries in the cash book.
Cash received for miscellaneous contributions and contributing members' dues,
as shown by stubs of serially numbered receipts issued in acknowledgement thereof,
was traced to the cash book and to cash records.
The receipts from debtors and individual bondholders recorded in the cash
book during the period under review, shown in the aggregate amount of $109,696.96
in the statement appended, were substantiated by reference to correspondence on file,
signed by the individual bondholders or paying agents transmitting the funds.
Confirmations, representing approximately 90% of the total dollar amount, of these
receipts were requested from the payors transmitting the funds and all replies were
agreed with the amounts as shown by the books.
Disbursements :
Paid checks returned by the bank were examined in support of all of the disbursements for the year. We also inspected vouchers, memoranda on file or resolutions in the Council's minute book in further support of these items.
Cash Balances :
The cash in bank at December 31, 1939 was confirmed by means of a certificate
obtained direct from the depositary and the cash on hand was counted during the
course of our examination.
General:
So far as our examination extended, we are of the opinion that the appended
summary of cash receipts and disbursements properly sets forth the cash transactions of Foreign BondholdersProtective Council, Inc. for the year ending December
31, 1939.
PRICE, WATERHOUSE & CO.
56 Pine Street
New York
Yours very truly,
Price, Waterhouse & Co.
81
SUMMARY OF CASH RECEIPTS AND DISBURSEMENTS
FOR THE YEAR ENDING DECEMBER 31, 1939
GENERAL ACCOUNT
Balance on hand, January 1, 1939
$
200.00
Receipts :
Miscellaneous contributions
Contributing members' dues
$111.95
575.00
Transferred from Reserve Account
$ 686.95
71,765.49
72,452.44
$72,652.44
Disbursements :
General expenses conducting negotiations with defaulting governments
—
Officers' salaries
Salaries of office staff
Counsel fees
Accountants' fees
Rent
—
Other general expenses travel, telephone, telegraph,
printing, office supplies, postage, corporate fees and
expenses, office furniture, taxes and miscellaneous
$40,511.11
9,077.50
33.94
175.00
3,970.00
18,684.89
72,452.44
Balance on hand, December 31, 1939
$
RESERVE ACCOUNT
Balance in bank, January 1, 1939
$ 68,984.50
Receipts :
Contributions from debtors and bondholders
Disbursements :
Transferred to General Account
Balance
in Bank,
December 31, 1939
200.00
109,696.96
$178,681.46
71,765.49
$106,915.97
82
CONTRIBUTING MEMBERS
D. E. Cadick, Grandview, Ind
Caledonia National Bank, Danville, Vt
City National Bank and Trust Company, Salem, N. V
Commerce Trust Company, Kansas City, Mo
Abby C. Corey, Portland, Me
Arthur C. Crane, Burlington, Vt
Herman W. Freund, Chicago, 111
Joseph Godow, Chicago, 111
Greenville Depositors' Corp., Greenville, Mich
F. W. Heitmann Company, Houston, Tex
Highland-Quassaick National Bank and Trust Company, Newburgh, N. V
Indianapolis Bond and Share Corporation, Indianapolis, Ind
B. A. Kliks, McMinnville, Ore
The Lincoln National Bank, Cincinnati, 0
Charles Mandel, Milwaukee, Wis
Addie McCall, Huntingdon, Term
George M. Ness, Jr., Brooklyn, N. V
Old Kent Bank, Grand Rapids, Mich
Roman Pena, London, England
Ralph J. Pendleton, Los Angeles, Calif
William C. Person, Buffalo, N. V
George P. Pollard, Gillett, N.J
Charles Rayner, Redwood City, Calif
John R. Scanlon, Chicago, 111
B. F. Smith, Maryville, 111
George L. P. Squibb, Lawrenceburg, Ind
Arthur R. Suckley, New York, N. V
Edward H. Temple, Altadena, Calif
Alan J. B. Tickle, Port Kembla, Australia
United States Trust Company of New York, N. V
Utah State National Bank, Salt Lake City, Utah
Ella P. Walsh, Berkeley, Calif
Welsh and Green, Incorporated, Chicago, 111
Ed. M. Wiggins, Lynchburg, 0
Robert Wilhelm Wilde, Los Angeles, Calif
$ 10.00
10.00
10.00
20.00
10.00
10.00
10.00
25.00
10.00
10.00
20.00
15.00
10.00
30.00*
10.00
10.00
10.00
50.00
10.00
10.00
25.00
10.00
10.00
10.00
11.00
10.00
10.00
10.00
10.00
100.00
f
10.00
25.00
10.00
10.00
NON-MEMBER CONTRIBUTORS
Hazel Brookes, Lebanon, O
F. F. Clapp, Nashotah, Wis
Winslow R. Cuthbert, Bombay, India
Selden S. Dickinson, Detroit, Mich
D. A. Eger, Germania, West Va
Ed. H. Gjerde, Morris, 111
Robert A. Hamilton, Bethlehem, Pa
Charlotte H. Herrmann, Evanston, 111
Robert B. Hopkins, Milton, Del
S. C. Kellenberger, Riverside, 111
T. C. McCourry, Hoquiam, Wash
* $15. to be considered
as membership for 1938.
t Gave $75. in 1937 for three years, 1937, 1938, and 1939.
.^
$ 1.00
5.00
2.00
5.00
5.00
1.00
1.25
7.50
1.00
3.20
5.00
N. A. McCully, St. Augustine, Fla
Carrie C. Nichols, Laguna Beach, Calif
William Nolden, Peoria, 111
Rex S. Roudebush, Tacoma, Wash
Jack Sheean, Bloomington,
111
Jay Trumpy, Orange, Calif
Evelyn Walker, Kew Gardens, N. V
Charles Willett, Atty., Springfield, Term
FOUNDERS
Hendon Chubb, New York, N. Y.
Grenville Clark, New York, N. Y.
Alanson B. Houghton, Corning, N. Y.
Frank O. Lowden, Oregon, 111.
Henry L. Stimson, New York, N.Y.
Thomas D. Thacher, New York, N. Y.
FULL MEMBERS
Laird Bell, Chicago, 111.
Hendon Chubb, New York, N.Y.
J. Reuben Clark,Jr., SaltLake City, Utah.
Herman L. Ekern, Madison, Wis.
Pierre Jay,New York, N. Y.
Roland S. Morris, Philadelphia, Pa.
Dana G. Munro, Princeton, N. J.
James Grafton Rogers, New Haven, Conn.
Thomas D. Thacher, New York, N. Y.
John C. Traphagen, New York, N. Y.
Francis White, Baltimore, Md.
Quincy Wright, Chicago, 111.
83
13.75
5.00
3.00
2.00
1.00
3.25
1.00
50.00

Foreign Bondholders Protective Council, inc.

Transcription

Similar documents

confidential great lengths price for hair

Welcome to the RCCAQ`s 39th Annual Convention

RADICALES LIBRES

908 - 3000ºF Electrical Resist/Thermal Cond.

Do liry o:`i fHn rssuE A$tD sAtE 0F COVUtitliiNT rcIiDs

Corporate bonds a good bet amid global volatility in equities

Presentation 8 - Environmental issues and remediation_Beldowski

TNT is a molecule. Molecules are made up of different types of

CIS Special Opportunities – Gene Zolotarev, Max Capital