Revision of War Debts

June 10, 1936

Report Outline
Continued Defaults on World War Foreign Debts
Origin and Initial Settlement of the War Debts
War Debt Developments Since Hoover Moratorium
Proposals for Debt Revision and Final Settlement
Special Focus

Continued Defaults on World War Foreign Debts

All foreign governments indebted to the United States, with the exception of Finland, are expected to default the semi-annual payments due June 15, 1936. The accumulated total of sums due and unpaid under the original funding agreements and the agreements for liquidation of payments postponed during the Hoover moratorium will amount on July 1, 1936, to $1,165,423,332. Although no formal moves have yet been made looking either toward resumption of payments on the old schedules or toward revision of the existing obligations, evidences of a desire to reconsider the whole question of war debts have recently been given both in this country and abroad.

Recent Moras Foreshadowing Eventual Debt Revision

While the subject has been discussed sporadically in all recent sessions of Congress, action has been limited to declarations of policy opposing cancellation. At the present session consideration of the matter has taken a more practical turn with the introduction of several bills and resolutions calling specifically for appointment of a new commission, similar to the World War Foreign Debt Commission, to negotiate fresh settlements of the obligations outstanding. None of the measures has been reported, but their mere proposal signifies increasing realization of the fact that further collections will depend upon revision of the original funding agreements.

An important indication of willingness on the part of one of the chief debtors to consider a reopening of the question came on May 15, 1936, when Leon Blum, before assuming the premiership of France, voiced the urgent hope in an address before the American Club of Paris that the misunderstanding caused by the debts could be resolved.

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