164.12/954
The Chargé in Rumania (Dennis) to the Secretary of State
[Received February 13.]
Sir:
. . . . . . . . . . . . . .
The Commercial Attaché of the Legation, Dr. Van Norman, has just communicated to the Legation a translation made by his Office [Page 657] of an agreement concluded on December 20, 1923, between representatives of Rumanian debtors and the French Consul and Commercial Attaché, respectively, acting as principals for French creditors, who had authorized the last named so to act for them. The most important features of the agreement are the following:
- 1.
- It applies to commercial and private debts contracted between November 11, 1918 and January 1, 1922 by the Rumanian parties;
- 2.
- It allows a maximum moratorium period of twenty-six years;
- 3.
- Debtors admitted to the benefits of the agreement must deposit a guarantee equivalent in value to four lei for each French franc owed, in acceptable securities,—at the prevailing rate of exchange this means about 40% of the debt;
- 4.
- Liquidation of the debt at the rate of 7.33% annually, of which 5% will be applied as interest, and the remaining 2.33% for the amortization.
- 5.
- This agreement will be ratified by the Council of Ministers and appropriate legislation passed to protect French creditors from executions against their debtors at the demand of other creditors with whom a collective agreement may not have been reached.
In reporting this agreement to the Department of Commerce, the Commercial Attaché states, in a letter dated January 9, of which a copy is herewith enclosed for the Department’s convenience,62 that he considers it is now time for some action of a similar nature to be taken in respect of American creditors having debts of this character against private individuals or companies in Rumania. He refers to the cases of the International Harvester Company, which has a claim of about $400,000. against Staadecker and Company now before the courts, also the case of Bencoe Export Company versus Kosca and Banca Agricola for a sum of about $40,000.
. . . . . . . . . . . . . .
There appears to be no reason to believe that the present Rumanian Government, nor any one likely to succeed it, will permit, in the near future, the courts of this country to give legal relief and apply legal remedies in accordance with the commercial code and the customary laws of the country against any debtors in Rumania on the petition of any foreign creditors, where the debt belongs to the category covered by the agreement herein reported. This conviction is shared by all the foreign representatives in this capital, as shown by the fact that the two largest creditor nations, England and France, have already concluded special agreements, while Italy, Switzerland, and Czechoslovakia are at present negotiating towards this end.
It seems, therefore, that American creditors have the choice of concluding an arrangement along the lines already laid down in the two agreements just mentioned, or submitting to an indefinite moratorium.
I have [etc.]
- Not printed.↩