■X j 'r' '■ • w A i X' '>/ >k i T- • -t-'i XX XX.-/ ; j 31 T - h " . KUINK E 8' v-:, ^ Si—- I ROMANIA MINISTER OF FINANCE THE REPORT OF THE MINISTER OF FINANCE COUNSEL OF MINISTERS ON THE SITUATION OF ROUMANIA CREATED BY THE, REPARATION AND INTERM, LIED DEBTS POLICY SEPTEMBER 24th 1&25 BUGAREST GOVERNMENT PRESS 1925 ROMANIA MINISTER OF FINANCE THE REPORT OF THE MINISTER OF FINANCE L- TO THE COUNSEL OF MINISTERS ON THE SITUATION OF ROUMANIA CREATED BY THE REPARATION AND INTERALLIED DEBTS POLICY SEPTEMBER 24th 1925 » BUCAREST GOVERNMENT PRESS 1925 . "X il 'w.vl'U'l 6 Bibliothek REPORT PRESENTED TO THE COUNCIL OF MINISTERS THE POLICY OF ROUMANIA’S INTERALLIED DEBTS WITHIN THE SCOPE OF THE REPARATION QUESTION. Ptoumania, thanks to her proper efforts and sacrifices, was able to build up her financial consolidation on solid foundations, in spite of all the difficulties which the war and the making of her unity brought on her. We have called lo mind both in the memoirs we formed in time (anexes 51, 55, 60) to be sent abroad, in the statements on our different budgets since 1922 — as well as in the reports presented to the Council of Ministers (in Feb. 1922 and June and September 1923) all these difficulties and the road to be followed for over coming them. The last stage of this consolidation, was completed by the law voted in June 1925 for extinguishing the issue of the National Bank on behalf of the State and for proceeding on our monetary consolidation. So that we can say without any fear that all that depends on us has been done; the balance of the budget the inscription of the internal and external public debts amongst the ordinary expenses of this budget, the consolidation of the external floating debt; and the extinguishing in a short time of the internal floating debt left by the past defi cient budgets and at last the assuring by our own proper means of exinguish- hing the issue made by the State through the National Bank as we said above. There are only two classes of our obligations which are not yet satisfied : The requisition bonds (amounting) to about 900 million lei) and the internal treasury bonds (amounting to about 500 million lei). For the first, we entered in this year's budget an aproximatwe sum of 100 million lei, to make a beginning of paying off this internal war debt, where as for the second we were able, thanks to the available sums at the »Casa de Depuneri« to withdraw a value of nearly 200 million lei. The State owing this sum to that institution. she sum to which these two outstanding liabilities amount, seeing the increase of our budgetary resources, allows us to hope that also this last in ternal debt will be paid off. ** -, ' k 4 A * « « . . ra** As regards private external debts we only had two more important claims of the United States amounting to about 300 mill. (The Baldwin works and a part of the Interoceanie Company Bonds) which by the arrangements we have made, we have been able to consolidate for long enough terms m which the annuities can be supported by the ordinary budget of the State. The elasticity of our budget allows us to a certain extent to foresee not only the possibility of satisfying these ontstanding obligations, but also to begin the work of reconstruction, so imperiously demanded by the necessities of our enlarged country, and which up to now have only been undertaken in a very feeble proportion. In order to arrive to such a result in a comparativly short time, Rouma- nia was obliged to restrain all its wants and to demand sacrifices, especially from two classes of citizens; the State Officials and pensioners, and those bav in" suffered damages by the war — For the first, the balancing of the budget and the increase of the State revenues allowed us to give very important sums, although insufficient ones during the last four budgets (nearly 6 milliards of lei), but, also to be enabled by the budget of 1925 to undertake for the future a question of normalizing the salaries paid by the State. If new charges had not come upon us from abroad, if the policy of order in expenses and of good administration of the revenues will be not only con tinued but also strengthend, by the works which are beeing prepared by the Central Commission for reorganizing the public services, we hope that in a short time this question also will be completly resolved. As regards those who suffered damages by the war, the tact of our former enemies not having fulffilled their obligations, and in general the means adopted for applying the Treaties have obliged us to meer the satisfaction ot these claims within our own feeble means. The Roumanian State was placed in the painful dilemma of making like France an anticipated payment of the war damages, without having yet re ceived them from the enemies, endangering in this way her general finalicia consolidation, or to assure first that consolidation, which means general pros perity, in order to be able after that, by her proper means to compensate the non payment by our former enemies. The importance of the damages suffered by Roumania compared to our public wealth (over 31 milliards of lei gold, most of them proved by judicial sentences). The spread of these damages on account of their nature over the whole surface of the land and all branches of activity, and especially the fact that many of these damages could not be directly estimated, being t e consequences of the disorganization and general destruction brought on by the war and the occupation by the enemies, and also destruction by some of the allies. The issue of notes of the »Banca Generates the monetary unification, the stopping of transports for more than three years, the destruction of indus trial plants especially the petroleum works, the prolonged mobilization ol the Roumanian army etc. allows us to assert that, as the whole of Roumania 5 beeing damaged, the restoration of general situation, as normally and hast ily as possible, must be for every body and consequently for those having sulfered damages a greater satisfaction than the sums which we might advance them to the pi ejudice of this consolidation and normalization. This is why we thought it best to follow the second solution. We think that in the serious financial situation in which some ot the Allied States which have adopted the first solution are placed, justified the prudent and unselfish manner in which the Roumanian State had acted. In the situation in which Roumania was on the morrow of the war, by pay ing the war damages and satisfying in a very feeb'e measure the sufferers by an ticipation, would have increased the evil rendering the financial restoration of the country impossible. Certainly that this prudent behaviour should not prevent us from thinking of these sufferers and of the special sacrifices which some citizens have made. More especially the Roumanian State has inscribed out ot its own resources the pavment of important sums for war pensions both in the former Kingdom as well as in the freed provinces, payments which the armistice and the treatees had put to the charge of our former enemies. Therefore as soon as we were assured of the balance of our budget and even of excesses, we destined in the last two budgetary years certain sums (very re duced compared to the total of the damages o50 mil lei) for assisting those who were seriously harmed. Of course the fii al settling of this obligation will depend in the first place, on the general policy of reparations and of interallied debts which forms the principal object of this report. On this policy it will depend whether our nationals having suffered war damages will be assisted, or it on the contrary new sacrifices will be demanded of them and the whole coumtry, making them pay instead of onr former enemies. This is in a short summing up, the stage in which Roumanian finan cial consolidation is at this moment We might resume it as we said above by the following assertions. The Roumanian State by its own means without any help from anybody, with great sacrifices made to the detriment of its restoration and endowments has assured its financial consolidation. It has therefore done all that depended on it. Alter the general war however, more especially for the States which parti cipated more completely in the hostilities, their financial consolidation can be strongly influenced by the manner in which the treaties will be applied for hastening or retarding the restoration of the country, and by the manner in which the question of the debts contracted between the Allied States during and because of the war, will be settled. Therefore the financial consolidation will be influenced by two factors which unfortunately this time do not depend exclusioly on us and our means. It is indifferent if these two questions will be joined together when they are s' rw*' 6 settled by the creditor States, for us they are closely bound together and we cannot examine their effect on our financial consolidation unless it be together. It is all the more indispensable to throw o general glance at this moment, not only because we proceeded by our latest monetary law on an important step- tor our internal financial consolidation but also because there is on the one hand a tendency since a few years, in the application of the treaties and the reparation policy, to create for us a dangerous situation which would com promise completely the sacrifices and the efforts made by us to this day. (See the protest of the Roumanian delegation in Spa. Anex 48; the Memoirs men tioned above of lune 1923 at the London conference 1924, at the conference in Paris in 1925, Anex. 55 and, 60-and the Memoirs drawn up tor the L. D. N. of Dec 1924). And on the otlier hand because the question of the Interallied debts is to day discussed directly by our two principal creditors the United States of America and England. Comparing the situation created by the treaties with the one established by their application we will be able to explain more clearly, on one part our rights and our obligations, and on the other part our possibility of fulfilling them, and consequently to determine the attitude of the Roumanian State in this serious, and I may say, decisive phase of our financial consolidation Therefore by mutual agreement with the Minister of Foreign Affaiis I thougt it well to set the stage of these questions at the right point of view, both by publishing the documents on which our rights and obligations should by founded and by examining the conclusions that we can draw from all these documents and to see in what limit we are in the possibility of fulfilling them. The clearer this question will be, the better "the Roumanian State will know how far it can go with the concessions which are demanded, without endangering its consoli dation and I should say its evolution--. And the creditors and other States inte rested in the reparation policy will bo the better able to judge our attitude and our demands, and at last the Roumanian public opinion will know all the better our rights, and will give us its assistance for obtaining them. In the memoirs which are attached to this report, one on the reparation policy and the other on the Interallied debts we gave the necessary explana tions for you to know how these matters have evolved until this day. But we think that it is well to make a short study of investigation on the general and special situation of Roumania in this double matter of reparations and Interal lied debts, in order to be able to interpret this study as completely as possible. In the first of these two questions the reparations, whatever may be the manner in which the treaties were drawn up, Roumania, once she had signed them, had nothing else to do than submit to them. They were treaties of a ge neral character and they were based on »equality and equity--, which were to continue the solidarity of the Allies of the great war. But immediately, after they were drawn up and ratified, the procedure which followed caused a con tinual infringement of this treatment of equality and equity which was provid ed and which ought to have been respected in the application of the rights * * k * * * 4, -t * «r * 1 k. •* « e> * r> s'. Z^v^VtS'CV/V^ /%?> ^ 7 Bibjiofhek ” < O and obligations which were stipulated. We submitted and we still subitti^, to the general measures taken to the detriment of all the Allies and the heneHkof ^ our former enemies, but we cannot admit the iniquities that have been com mitted, by setting aside the equality of treatement which was so necessary for those who sacrificed themselves during the war. Our entering on this dangerous path was brought about by two acts. The first: The Spa agreement which meant the deciding of the reparations in our absence, that is the possibility of putting to our charge in the benefit of other Allies the succesive advantages accorded to our former enemies. The other, the continual tendency of demanding the anticipated enforcement of our obliga tions without reducing or establishing the rights with which these obligations ought to have been compensated as ordered in the spirit of the treaties. The protest of the Minister of Finance Mr. Titulescu together with the acknowedgement of the commission of reparations determined the start ing point for the attitude of Roumania in these new phases in which the ap plication of the treaties enters. The interventions and the memoirs of the Rou manian Goverment to the governments of the great Allied states and to the commission of reparations (dune 1923) as well as to the London Conference in August 1924 and the Conference of the Allied Ministers of Finance in Paris Jannary 1925, did nothing but precise at each step, the situation, more unjust and inadmissable which was created day by day for Roumania by the develop ment of this mistaken policy in the application of the treaties. The Roumanian Government was all the more obliged to defend her unquestionable rights, for the reason that the conferences that took place and the successive underhand mea sures helped to render the situation of our country more and more difficult impairing these rights continually. Not only were these obligations which were imposed on us maintained without any modifications, but even their anticipated enforcement was demanded. The unjust situation which is created for Roumania has in our opinion the following causes. Primo 1. The isolated position in which we were as to our great Allies contributed to their not having a knowledge, or forgetting the sacrifices, the contributions and the damages which we suffered for the common cause, and which it is necessary for us to call to mind. 2) The non payment on the part of tlie enemies was the cause for each State to be obliged in the first place to defend its proper interests often slipping, over the terms and the provisions of the treaties signed by them all. These tendencies necessitated a stronger defence and a more decided and continual observance of our interests. 3. The very difficult situation in which the general war had left us, placed Roumania in a critcal situation just at the moment when she needed for her existence the assistance of the Allies and when she was a debitor incapable of paying and at the same time in the impossibility of defending her rights against anyone, 8 4. The internal cares which worried her at that time both by the conti nuation of the war on the Dniester and the Tisza and by the needs she was in ot normalizing the internal life of a State which was almost newborn out of the war, and which had to unify four different regimes. But now it is not we that raise this question in order to reestablish our rights which are trampled under foot or injured, but on the contrary the hurry which is shown to make us pay our obligations by anticipation, forget ting that they were closely bound to our enemies first fulfilling their obligations reduced, put off completely for gotten: thus succesively by the Innsbruck agree ment we are requested to pay by anticipation the pre-war debts of Austria and Hungary against us, when to these States were granted not only adjourn ments of their payments but even assistance in money, and when the damages to be paid to the Allies States were not determined and are not eren determined to this day. And whm later on the experts of Dawe’s plan desir ing to limit thier action to the study of a single question the possibility of Ger many to pay, left the division of the sums paid by Germany and the establish ment and priorty of payments and the settlement of our special claims recogniz ed by the Armistice Convention and the treaty of peace (the recovery of the value of the Banca Generala notes, the payments made in accordance to the Treaty of Bucarest of 1918 repealed by the Treaty of Versailles) these claims were to form the object of the futur negotiations or conferences. At last lately a tendency existed for demanding the issue of bonds, which were to be given to the common treasury, for the liberation quota, that is a new payment made by us to cover the needs of our former enemies which were alwayr put off and assisted As we showed in different memoirs this would mean not only our paying instead of our former enemies, but what is more, by the heavy charges laid on us it would mean laying fresh charges on the Roumanian rate payer without giving anything to our own sufferers, this would make any kind of restora tion or endowment i impossible and would even destroy the fruits obtained for our financial consolidation which up to this day has been done by our own selves. The appeal brought by Germany before the Commission of reparations for the notes of the Banca Generala, which was called to meet on November the 3"' d in Prague, to carry on the application of the Innsbruck protocol, are new points in the development of this new attitude. Parallel with this new tendency in the application of the policy of repara tions the question of the settlement of the interallied debts was set before us nearly for two years it came by two differrent channels oweing to the tendency of England of connecting these loans to the claims which we had against England and France for the destruction of our petroleum wells (see the applications made in 1920 to M r Titulesco then Minister of Finance, another on the part of the United States of America, which in 1924 put before Roumania the question of settling s the interalied debts.Without insisting on the succesive phases of this question, which probably on account of inexact informations nearly took the shape of a diplomatic conflict, to day after more than o year, has taken a more general cha racter, the great American Republic, demanding from all its debitor States, the settlement of this question, independently of reparations, we are also consequently like France, Italy, Belgium, Tcheco-Slovakia and Yougoslavia etc. before a situation, the necessity of studying the question in itself leading it to the future to see how it is developed. This necessity is created by the negotiations o 1 each debitor State, even if they have not yet arrived at a practical solution and also by the new attitude of, England, which by her note of June 1925 de mands that the settlement of the American loans be effected at the same time as hers, not admitting that we should pay one creditor without consider ing the rights of the others. Thus we are placed in face of the following situa tion: oh the one part the adjournment, the delay and the reduction of our rights, and on the other part taking upon ourselves the Austro Hungarian debts, the liberation quota, the value of transferred property, which establishes the quantum of the claim against us under the treaties, and at last the settling of the Interallied debts, for the American ones draw after them the payment of the English debts and therefore of the French and Italian debts. From the state ments made in the memoirs and the documents which we publish, the situa tion before which we find ouselves can be summed up as follows. 1. In the reparation policy: our rights for damages owed to us by our former enemies had been unjustly, against the terms of the treaty and without our participation reduced to the Spa quota which was derisory when the amount fixed for Germany to pay to the Allies for reparations amounts to 132 miliards of Marks gold. The question is still open for us. 2. The restitution of our special claims : The notes of the Banca Generala and the recovery of those ensueing from the anticipated enforcement of the Treaty of Bnearest, has not been settled as it ought to have been done for a privileged claim but even the mode of payment has not been fixed. Roumania though a victorious country has remained with war damages paid to the enemy, amounting to over 3 milliards gold, without receiving any thing from them, this question is still open and we have an interest in demand ing that it should be settled. 3. Although according to the Spa agreement, and by the different con ferences and treaties, the determination of the Austro-Hungarian reparations to which the quotas due to us were to be applied, had been decided, but to this day, those sums, on which we could settle our balance, have not been fixed, but even delays for paying them have been granted, That is, there has been no general plan for carrying out the decisions, formed for the suc ceeding states of Auslro-Hungary, as was done for Germany, by Dawe’s plan, and nothing leads us to think that such a plan is being prepared. Rouma nia demanded at the Paris Conference in Jan. 1925 the examination of the whole situation, and she must persevere in demanding her right. 4. This delay, aqd continuation in establishing the obligations deriving 10 especially for the succeeding States, without applyind to these obligations the reductions which were applied to the enemy’s debts, have created a dangerous situation for these succeeding States ; the compensations which had been pro vided miongst all those having liabilities, and rights were forgotten (See the Conference of March 22 nd and the bonds C. for the former to be recovered trom the latter annex 54) and in this way we have arrived in the extraor dinary situation, that while the enemies have been relieved, the conqueror allies were threatened to pay for them. In these conditions not ever receiving any other reparations than the de risory Spa quota, out of the German and Bulgarian reduced compensations, Roumania finds herself with nearly 3 milliards lei gold, paid to her former enemies, and with the invitation to pay the pre-war debt of Austro-Hungary, the liberation quota, and the transferred Austro-Hungarian property. 5. Roumania brought a special contribution to the cause of the Allies even beyond carrying away the treasure to Moscow, by destroying her petroleum works which have not been paid for to this day as was promised, this was a new loss of over £ 20.000.000 which must be added to Roumania’s contri bution towards the war. The settlement of this matter is still in suspense and our interest is to hasten a speedy decision. The manner in which in the inter allied debt policy, the creditor states de mand the settlement of the war debts of the allied states, has two effects as re gards us : to create by the above payment of the obligations which are put to our charge a negative balance, endangering in this way the financial consolida tion which we have undertaken and secondly also to endanger our monetary consolidation leaving the issue made in war time, without any security. We may class the creditor states trom the point of view of the interal lied debt policy in three categories: the United states who do not intend to connect the reparation policy with the interallied debts ; England who ac cording to the Balfour not", consents to a reduction but, only in respect of the payment which might be made to her by the former enemies and the reduc tion which the United States of America would make her; and lastly France who understands to bind the interallied debts with the payments made by the enemy, that is she requests that the good will shown to the latter should be shown also, at least in the same measure to the debitor allies. From the statement made above, and from the memoire joined to this report, taking into consideration the special conditions in which we are to day, the following are, in our opinion, the lines to be followed by us in order to arrive at a solution as complete and as solid as possible, of the reparation and interallied debts question. As we reminded you higher up the settling of the interallied debts has entered into a new decisive phase and as you were good enough to agree in July, a commission will start for America at the beginning of the month of Octo ber, in order to arrange with the Government of the United States of America vt; * -- « f V 4U- ** A > « f> * 11 vt; » ■ » r V > *< 4» O * > ' -ir the payment of these debts. As you are aware England settled the payment of her American debts in 1923. Belgium and Poland having special conditions have been making arrangements lately, whilst France, Italy, and Tcheco- Slovakia have announced that they are sending delegates to the same intent. The negotiations which the French finance minister, M r Caillaux has been car rying on in England and the agreement made by Belgium in Washington, have given certain precise indications on the intentions of these three principle credi tors of the Europeen states, they indicate also for us the necessity ol nego tiating these matters with all our creditors for this object we applied both in Paris and in Geneva to the representatives of our three creditor states, England, trance and Italy, showing them on one side Roumania’s decision of considering the claims of each of them, and on the other side, the conditions in which this matter affects Roumania on account of the question of reparations not being yet cleared up, and on account of her possibility of paying being influenced by her depreciated currency. Mr. N. I itulescu, who I propose, is to lead, the commission which is sent to America, both by his sit uation as Minister of our country in Great Britain and of his participation as Minister of finance and Delegate of this country at the different international conferences, will be able to carry on with succes, the negotiations entered upon by me in Paris and Geneva. As however, the question of our debts in England is not only one of the most important its settlement will have influence also on the other continental states which are our debitors and creditors, it is necessary that before he goes to America he should have some precisions for settling these debts. It is all the more necessary to have these precision, as we would not be able to establish our possibility of paying before knowing completely the charges left by the war, therefore the clearing up of our rights and obligations, a clearing up which cannot be obtained without the intervention of the other European allied states is most importans. 1'hese explanations must embrace all our obligations deriving from the treaties and connected with our rights; our claim for the destruction of oil fields, and our special claims against Germany. In this commission will take part, as vice-president Mr. Eftimie Antonescu, judge at the high court of Chancery and Justice, who took par t in all the works of the conference of Paris in 1919 and in those which came after. He moreover took part in the negotiations with America in 1923 when the value of our debt was establised. In this commission will also take part, the director of war damages at the Ministry of finance, and other special persons will assist in expounding the Roumanian point of view. But*at the same time as establishing our debts there remains a no less im portant matter for the carrying out of the engagements we will assume, namely the mode of payment as regards Roumania’s possibilities. This possibility is ruled by three factors : a) The budgetary ressources which we will have, so as to be able to ins cribe a new charge; 12 b) The liabilities which still burden our present budget ani which were imposed by the financial consolidation made up to now, of those which will be inscribed in future, for measures of another nature and ; c) The conditions of our rate of exhange. Roumaniahas as we pointed out above, effected her future financial and es pecially her budgetary consolidation with her own means, but although we are in the fourth year of our balanced budget, we must not forget that in the limits of the ordinary revenues of the conntry. this necessary balance was arrived at with great sacrifices and that we had not only large misses to fill up for the budget which does not correspond to our needs, but we also had sums to enter, intended for restoration which is only just beginning, and for our nationals who liave suffered bv the war, and only received up to now very reduced da mages. The excesses given by our present budgets were not only the conse quences of a prudent policy which was absolutely necessary in the uncertain circumstances through which we were passing. But at the same time to proceed in a sure manner to the normalization of the budget and therefore to the complete satisfaction of all public services, in the future arrangements that we shall make, we must not forget that as normalization is obtained, so by the stabilization of the leu and of internal pri ces assured in the same way we shall have to reduce and even to suppress the income of the exceptional export taxes, and on business winnings, we must not forget at the same time that the new law on spirits will produce an im portant decrease in the income of indirect in duties. The financial consolidation and especially of the external floating debt, the participation of the State in paying half of the expropriated land, impose* *) fresh charges on us; the first will swell the general budget until 1930 considerably, the latter for a term of fifty years with the annuity of a capital which is hot yet determined, but which will possibly necessity an annuity of 500 millions. The Austro-Hungarian pre-war debt, immediatly that this obligation will be established, will likewise charge the coming budgets, which will be all the heavier to bear as balances will be demanded in a longer delay, and in a shorter period of payment. But in order to be able to fulfil our engagements whatever they may be, the possibility of paying these obligations will be strongly influenced by the conditions of the Roumanian rate of exchange Roumania has stabilized its cur rency but of all the States that have done this, her currency is the weakest com pared to gold. Therefore any obligation of payment abroad, now that her payment ba lance is equilibrated may endanger this stability, and may place the Rouma- *) The sum to be paid in cash for the consolidation : Lei 1.210926.92',90 in 1925 Lei 815.497.170,29 in 1929 • 1.254 398.550,30 » 1926 » 835.108 542,50 » 1930 » 1.295.199.428,50 , 1927 » 146.438.108,- » 1931 . 1.134.028.182,10 » 1928 nian State not only in the painful situation of not fulfilling its engagements but also of compromising completely the fruits obtained till to day with so many sacrifices. As you know very well by the late convention with the National Bank and the law passed by Parliament in June last year we endeavoured to begin our monetary consolidation and to assure the stability which we have obtained. But this operation, in order to be complete demands a long period (15-20 years) during which we must be very careful especially as regards the balance of our foreign payments. This balance will be more especially influenced by the balance of our ex ternal commerce. The results obtained already and the development of the riches of the country, make us feel certain that the future trouble would not come from our economical balance sheet but, from the financial policy of the country which might destroy or reduce the good effects of economical lile. Therefore in the negotiations which will be carried on, we must consider more especially the modes of payment during the delicate period of our mone- tary consolidation and of our rate of exchange: the more facilities our credi tors will make for us to keep up our monetary stability, and to complete as soon as possible our monetary consolidation, the more the debts well be will secured and the payments will be easier. That is why even in the interest of our engagement to pay being as sure as possible, we must obtain not only easier conditions during the first period of our consolidation, but also adjournments. Bus whatever these payments may be, the problem for us as it has been for all sums sent abroad will be : nHow are these payments to be made so, as not to cause a fall in our rate of exchange and in the equilibrium of the budget*. (The transfer question which gave rise to so much discussion over Dawe’s plan). In a normal economical si tuation with, the exchange at a normal rate, and a just payment of the allied debts, and of the reparations, Roumania by the annuities which she would have to pay in lei gold, would have nothing to fear from those transfers, unfortu nately however her situation for some time will be such that the trans forming into lei of the annuities gold and the fact that only when we are arriving at the equilibrium of her eternal economical balance max imperil her monetary stability and consolidation. We wish to add that for the same reasons we must be equally prudent in this period of monetary consolidation, also for the other engagements which we will have to make, as for instance those for fresh foreign loans: Their conclusion must be closely bound with our monetary consolidation. During these negotiations we must not forget the claim which Roumania has against her great allies, for paying the debts caused by the destruction of the oil works. At the same time as these negotiations we must demand the settling of the question of the payments to be made for the Austro-Hunga rian pre-war debts, as the agreement of Innsbruck cannot be accepted by our State in its present form. We must hope that the negotiations going on 14 T' with the French government through our delegate at the commission ok repara tions will come to a good end for both parties, and that we will be able at the conference which is to meet in Prague in November we may be able to leave the reserved attitude which the inadmissible conditions of that agreement imposed on us. The interventions which we have made and the negotiations which are beginning will have to be adapted every moment to, the circumstances in which we will find ourselves during the negotiations which are going on also between the other creditor and debitor States; but we think that the documents which we are producing to day, the conclusions which we draw from them will help us much in the decisions to be taken every moment and for each case. My object has been by this study, at a decisive moment to be able to draw attention on the difficulty and the importance of the question for us, and by examining the past to be better enabled to enlighten our attitude for the future. This enlightenment not only must give Roumania the possibility of being also this time a debitor who fulfills his obligations hut also by the agreement to be concluded, to put aside the last con diets of a material nature which pro duce difficulties between States, which not only have been side by side in the general war but who, also in tuture can work closely together for their needs of all kinds. If you approve the general lines indicated by this report we beg you to authorize the Minister of Foreign Affairs and myself to send a commission to the United States of America so as to settle our war debt, and to authorize us to lollow up at the same time and on the same norms, negotiations, with other creditors and debitor States of ours. Minister of Finance VlNTILA I. BrATIANO. Septembre 24 tli 1925. / V * i ' * M > - # r ' ■ PART I The situation of Roumania in presence of the Treaties OF PEACE AND OF THE CONVENTIONS AND AGREEMENTS WHICH FOLLOWED THOSE TREATIES After seven years since the general armistice, after five years since the sig nature of the last Treaty of Peace, the state of uncertainty left by the appli cation of the treaties and their subsequent modifications necessitates an exa mination and a precising of lloumania’s situation in presence of these Treatiers of Peace, and of the Conventions and Agreements which followed. As regards Roumania this examination is more specially demanded, as whatever may have been certain unjust treatments provided in the original treaties, incidental proceedings, in most cases, taken without the participation of the interested parties, created for the States, so called, »States with limited interests", a situation, if not actually dangerous, at least of inferiority for re cuperating their rights. At a time when the settlement of the »Interallies debts" is claimed, when the estimation and the enforcement of the obligations imposed by the treaties on the States so-called with limited interests, it is necessary, in view of the new obligations which might be imposed on Roumania, to precise the financial con sequences of her war. In the second part of this exposition concerning the »Interallied debts--, we will show the circumstances and the conditions in which Roumania, soli dary with her great allies, entered the war; in that part we will mention those circumstances and conditions, as far as it will be necessary for examining and precising the reparation problem, and more especially in the application of the treaties which constitute for Roumania a question of vital importance. CHAPTER I GENERAL CONSIDERATIONS ON ROUMANIa’s WAR We will examine the special conditions of Roumania’s war, discriminating the period socalled »armed neutrality-- from the “war proper-- period. 16 *4 % FIRST SECTION ARMED NEUTRALITY PERIOD (1914—1916) The world’s war begins in August 1919, that is, hardly a year alter the Bal- kanic war, in which Houmania was obliged to take part in 1913, in order to reestablish the equilibrium in Eastern Europe, where she represented the prin ciple of peace and stability. The aggression of the Central Powers in August 1914 allowed Roumania, on the one hand to desolidarize herself from them, withal her critical position on account of her isolation, and on the other hand to afford an indirect aid to her future allies 1 ). Roumania’s neutrality, kindly towards the a Hies (See annex No... The Con vention with Russia, dated September 1914) imposed great material sacrifices on her. 2 ) Her economical and financial situation which was so flourishing to that moment, (Annex 8) was immediately impaired not only by the blocking of the Dardanelles, but also by the attitude she took regarding her commerce on her Western frontiers, both in order to prevent German transit towards Turkey and Bulgaria, as well as to baulk the Central Powers in supplying themselves with petroleum, cereals and wood. This provoked almost a complete stagna tion of export just at a time, when a particularly rich harvest, when large quantities of petroliferous products and of worked timber were stored up. Roumania conscious of the sacrifices which are imposed by neutrality, bore them with patience, preparing herself for the moment which was not. far off, when she would be able to fight by the side of the allies for the common cause. The time which passed from August 1914 till August 1916, was for Rou mania not a period of quiet and fruitful neutrali ty, as it was for other countries but a period of sacrifices, of anxiety, and of trouble in the midst of the prepa ratory efforts, for the last sacrifice which Roumania was decided to offer up to the allies, by cooperating with them in the war. The real dangers to which Roumania exposed herself, by her decided at titude against the Central Powers, which were thus impeded in their commu nications with Turkey and Bulgaria, for the supplies which they needed so badly, are set forth by our enemies themselves, as can be seen from the the do cument published by us in Annex I. Only considerations of expediency, and causes independent on the will of our enemies, prevented them from carrying out these threats. Being given the geographical situation of Roumania, the closing of the 1) The crown counsel of August 3 r d 1914, considers that there is no »casus foederis» as regards the Cen tral Powers* and decides to take measures for the defence of the frontiers. These decisions were the first step in aid of the allies. 2) By the Convention with Russia, Roumania undertakes to observe a kindly neutrality towards Bussia- which had as a conceuquence to assure Russia’s left wing, allowing her to make use of all her means on the other fronts in the interest of her other allias. Dardanelles for her export, placed her in the difficult alternative either of stifling herself economically, or of opening the gates of her Western frontiers for the enemy’s supplies, of which they were in so great a need that they made the most tempting offers, accompanied by threats, which at that time might have scared a much more powerful State. Roumania prefered the first alternative of economical suffocation, to help ing the enemy, even indirectly. The continual struggle that Roumania carried on during the whole time of the neutrality, against the attempts for carrying products out of the country by smuggling, is the best proof of this delicate situation. At the risk of her economical ruin, Roumania refused firmly the enemy’s offers for buying, and only when se was obliged to put off for some time entering the war, with the assent of the allies did she agree to conclude a contract for the supply of cereals. It was only thanks to this contract, concluded with the Central Powers, that an attack on the part of our future enemies, who intended to use even force, for supplying themselves in our country, was avoided. At the same time in order to annihilate the effects of this contract, and to prevmt supplying the enemy, the Roumanian Government concluded a similar contract with Great Britain (Annex 9). In the chapter referring to this matter, we will treat about this Britannic contract, we shall see how in the end it could not have the expected effect of helping Roumania, although it was very efficacious -for preventing the supply of the enemy. At the same time, in order to oppose their threats and to prevent the Cen tral Powers from opening a route towards Turkey, Roumania concentrat ed numerous troops along her threatened frontiers ever since the begin ning of the neutrality 1 ) troops winch cost important sums to maintain 2 ). This attitude obliged the Central Powers to mobilize on the Roumanian frontier a considerable number of troops, either for the object of exercising a pressure on Roumania, or for defending themselves against an attack on her part 3 ). Roumania’s geographical situation, cut off from her allies, laid on her ex penses, which no other State had to face, as all her supplies and the means for her future action where procured only from the Allies in very difficult condi tions of transport and insecurity, which increased the expenses. The Dardanei- 1) Roumania concentrated by series for periods of from t—18 months, the whole effective forces which could be mobilized, of her army, amounting to‘810.000 soldiers. Thus the i umber of men concentrated increa sed. so that on the day war was declared, there were I So 000 men on the Carpathian frontier, UO.tiOO on the South frontier, and in the interior the rest of the troops a"d the auxiliary services. 2 ) Roumania contracted in this interval, for keeping up her troops, and preparing them for war, four loans of 100.000.000 lei each at the National Bank, a consolidated loan of 4(10.0(10.000 lei on the internal market, land other loans abroad, which will be mentioned in their details, in part. II -Into allies debts* — Out of this oan of 400.000.000 lei, contracted on the internal market, the Roumanian Government paid the debt contracted at the National Bank, so that on .tune I (»->>> 1916, the debt of the State at the Issue Rank amounted to lei 3 ) On the South frontier of Roumania, Bulgaria, mobilized, during the period from 1914—1916,. the III rd army corps with 3 divisions, besides a part of the tOH 1 German division. les being blocked, and the Western frontiers forbidden, there remained only the long route, very expensive and uncertain, by the East through Russia and the Arctic sea. Her neighbourhood with the Russian Empire rendered the situation o neutral Roumania, which already was hard enough, still more difficult, and the consequences of this neighbourhood, were painfully felt by Roumania, as in the neutrality period, in the war period and in the period after the war. This first neutrality period can be reckoned also amongst the periods of sacrifices and charges, as on the one hand it prevented the progress of her economical development, which she had enjoyed up to then, while on the other hand it necessitated those enormous expenses and sacrifices, for the common cause, for preparing the proper material, and for continual mobiliza tion which took away from their useful work so many producing forces. SECTION II The war period (4916—1918) After two years of neutrality, which were spent by Roumania in such hard conditions, her effective entering the war was decided. Roumania, on the day and the hour agreed upon with her allies, entered into the fray without hesitation or reserve. From the first moment she drew on herself all the fury of the enemy, and consequently the greater part of their forces, disgarnishing in this way, (which was the chief object for her joining) the allies' front, at the precise mo ment when this dirgarnishing was most necessary on account of the attacks on Verdun. The importance of the aid afforded by Roumania is clearly acknowledged by the commanders of the enemies themselves in the different publications which have appeared since then , ). Isolated from her allies from the beginning, by her geographical situation, Roumania supported the powerful offensive of the enemy, all along her very extensive front (nearly 2.500 km.) a frontier which constituted a geographical inferiority, and could not be defended without the aid of the Russian armies. The aid, which the allies —at Salonika —and more especially our nearest ally at our East — Russia — ought to have given us, operated only i) The hostile effective forces opposed to Roumania, from absolutely certain data were: On december t- $t 1916 Germans . 13 divisions of infantry. » . 2 » » cavalry. Austro-Hungarians .... 8 » » infantry. » » .... 5 brigades » » » » .... divisions of cavalry. Bulgarians 3 divisions » infantry. » 1 » » cavalry. Turks 2 » » infantry. That is a total of 25 divisions, 5 brigades of infantry and 8 >/, divisions of cavalry. partially, whereas the presence of the Russian army on the Roumanian terri tory, became not only a charge, but even an additional danger 1 ). Abandoned by her Eastern ally, isolated from her Western allies, surround ed on all pirts by mortal enemies, Roumania resisted heroically, she went through all the hardships and disasters of war, and for nearly two years, not cared for by any body, she lives the most tragical page in her history which bad ever been tragical enough. Only those who were then in Roumania, reduced to a corner of her terri tory, can have an idea of the sacrifices made by her for the common cause, resisting, and by her resistance forcing the Russian army on her territory to prolong the maintaining of the Eastern front, which otherwise it would have abandoned much sooner. Later events have proved how the aid given by Roumania s Eastern ally was carried out, and how this aid ended by the Russian betrayal. Roumania found herself at that moment in the difficult and unprecedented position o a belligerent whose ally not only forsakts him, but what is more, turns against him, without having the possibility, on account of her geographical position, of receiving any help from her other allies. Roumania, who from the beginning had suffered the hardships of war, when the aid of her Western Allies in arms and ammunition, did arrive, though after long delays, when the Russian aid on the Roumainian front, did arrive, though insufficient and late, now by the falling off of the Russians, found herself completely cut off from the allies, and encircled by the enemy. After the first disasters, the Allies, fearing lest the petroleum reserves and oil industry should fall into the hands of the enemy, strengthening by this means its power of attack on the Western front, (for we all know what a de cisive part petroleum plays in modern warfare), demanded at the hands of Roumania the material sacrifice, of destroying this industry herself, by setting fire to the reservoirs, factories, wells, in fact all that constituted up to that mo ment, one of the most important riches of our country. The sacrifice on the part of Roumania of her only source of combus tible was such a tremendous loss, that the allies acknowledged Roumania’s title of creditor for the material losses she had suffered from this destruc tion in the interest of the common cause, and they undertook to pay these da mages directly to her. The advantages brought to the common cause, by this destruction, are evidenced by the weakening it produced for the enemy who counted on sup plies of oil products, so necessary in modern warfare, from Roumania 2 ). ') The effective Russian forces on the Roumanian territory, were : 43 divisions of infantry and 11 of ca valry, that is 1.000.000 men, of which aboul 530.000 were fighting troops, and the rest commissariat, and ditfdrent hospit al services, etc. s ) Ludendorf in his hook >!Ki"iegserienerungen« writing about the Roumanian oil products, says: »The stocks of petroleum which we found in Roumania, were not very considerable, The drilling plant had moreover been completely destroyed, and the wells skillully filled op. The English Colonel, Thompson, had fulfilled his task, which consisted in preventing us from working the oilfields. Hir work however did not render great ser- The destruction of this industry was so complete, that even after 5 years since the conclusion of peace, all the wells have not been able to be put into working order, and only just this year, the pre-war production has been arri ved at, by heavy sacrifices, as Roumania has not yet received any thing for these losses. Besides this, Roumania suffered also other damages, on account,of the interest the allies hal to prevent, by all possible means the enemy from getting supplies. These damages besides those provoked by actual war operations, consisted in destruction of bridges, technical works, stations, railways, buildings, depo sits, and factories which were unmounted, and destroyed by order, even in localities which were outside the fighting zone. We will quote for instance the destruction of a part of the bridges across the Danube at Cerna-Voda, 2 ) the unmounting and the destruction of factories in Rraila and Galatz, the destruction of agricultural plant in Muntenia and Oltenia, Several times in the carrying out of these orders, excesses were committed, the Russian armies destroying more than was absolutely necessary. The value of these damages and destructions stands out still more cons picuously if we consider that two thirds of the territory of Roumania was in vaded by fighting, and that the whole country and more especially Dobrogea was defended inch by inch by battles spreading ruin all around. In these circumstances the damages caused by the war spread over the whole area of the country, for a front of battle was not localized, till the whole terri lorry occupied by the enemy, was completely destroyed by retreating battles. The invaded territory remained 2 years a prey to the most ruthless specu lation of the enemy, who got its supplies from here, by the most abusive and unfair means, till it had completely exhausted every thing. One of the means of despoiling the population of the invaded territories was the issue of nBanca Generala" notes, by the hostile administration, by which under the false appearance of a real payment, goods to a value of 3 ) 2.173.000.000 lei notes issued, were carried out of the country. vices to the Entente, bU has din inished in a considerable meastre, the supply of our arnry and of the country in oil. The lack of oil, of which Germany suffered, must be partly traced to this fact. The military administration invited into the country, men web up m the peholeum incusti y m Roumania, and began actively to fulfil its second very important task, which consisted in reestablishing the oil production en the one hand by puttling right the wells that had been fil ed up, ai d on the other hand by operating new drillings, and restoring the refi neries so as to enable us to take up the work. The oil production rose, but slowly. i) Roumanian oil pioduclion from 1912 till today bar been in Ions as follows: 1913 1.885.225 1921 1.165.765 1917 517.494 1922 1.327.915 1919 920.437 1923 1.571.302 1920 1.168.914 1924 1.860.471 The bridge across the Danube at Cerna-Voda was destroyed at the express request of Gereral Ber- thelot, made in the name of the afiies (Annex 11) 3 ) The sum of 21 73 milieus, represents, according to the registers w hich were found, the value of the notes put into circulation by the armies of occupation. Out of this issue only 1453 millions were changed, the rest representing the notes which were held by the Roumanian population who did not change them in time, or by the notes taken by the the armies of occupation when they retreated. The third of the territory which had remained Iree served as front of battle for the army which had retreated into Moldavia, as a refuge for the evacuated population, and some times as a place of destruction for the army of the Eas tern ally, which had deserted from its duty. A consequence of the hostile invasion was also the necessity of placing in a safe place, the Treasure and the public securities, and for that object, at the demand and under the guarantee of the allies, the Roumanian Treasure, con sisting of gold for the security of the National Bank notes, of the deposits of the Banks, of the Deposits Bank, of the jewels of the Royal family and of pri vate persons, of public and private art collections, of private goods etc. she whole of this Treasure and all these valuables, are retained in Rusia. (Annex 15). Roumania exhausted materially, numberiug 800.000 dead on the field of battle, or on the roads to refuge-that is 10°/ 0 out of her whole population — abandoned by the ally who was fighting on her territory, completely cut off, by her geographical situation, from her Western allies, is obliged, having also the im plicit as-ent of the allies to remain in an expectant attitude, when theaimistice of November 16 l " 1917 and the treaty o£,Bucarest of April 18'\ was forced on her. This latter treaty forced on her by the enemy, not however ratified by her, provoked for Roumania new andh^avy sacrifices, whose amount we will expose in another chapter. SECTION 111 The continuations of the war (1918—1920) The lapse of time since April 1918, was not the least painful for Rou mania, for while not forgetting for a moment her final aim — of maintaining her army and her existence —in order to be able, at the right moment, to throw herself again into the fray by the side of the allies, which she did not hesitate to do in October 1918, when she enters the fray afresh, chases the enemy off her territory and takes part in the conclusion of the general armi stice in November 1918. For Roumania the war was not closed by this armistice, for in the spring of the year 1919, when the belligerant parties were proceeding to sign the Peace, Roumania had to take up the task of establishing order in Hungary, threatened by the anarchical revolution of her armies led by Bela-Kuhn. The war Roumania had to wage on this occasion was merely the continuation of the great war, whose latest events had taken place in the near East. The Roumanian State therefore continues the period of hostilities, to defend peace which was being threatened. This period during which the allies demobilize their troops, and begin to heal the wounds of the w ar, is made use of by Roumania for the common cause, bringing about the pacification of Hungary, the succouring of Tcheko-Slovakia and Poland, both threatened in the first period of their constitution by a hostile invasion of the communist troops. On the other hand the Russian betrayal, and the bolchevik danger at our Eastern frontier, obliges the Roumanian State to continue the war on the Dniester and to maintain its armed forces mobilized, till the Spring of 1920. Therefore by her special situation Roumania had to suffer losses, both by the destructions caused by the existence of the battle front on her own terri tory, as by losses of men, (dead and invalides) till the end of 1919. Once Roumania s war ended, her ruins should have been restored, useful works should have been taken up again, the aggressors should contribute in re building the ruins they caused, and in restoring the countries thev destroyed CHAPTHER II Roumania s rights to reparations according to the treaties of peace, THE CONVENTIONS AND THE AGREEMENTS CONCLUDED President Wilson’s speech on January 8 th 1918 mentions the obligation, of reconstructing the ruined regions of Roumania, Servia and Montenegro while the armistice Convention of 1918 stipulates in article XV the obliga tion of returning all documents, valuable property (moveable and fiduciary), as well as the return of the Roumanian gold taken by Germany, or given up to her or her allies (Annex 26). The armistice concluded on Novembre 11 th 1918, for a delay of 36 days is extended from December 13'" 1918, till January 17 th 1919 with a right of extension from month to month, till the conclusion of the preliminaries of Peace. The charge of providing clear and precise conditions for the reparation of damages was reserved for the treaties The starting point was, to leave on one side any kind of reparation in respect of the so called war expenses proper, allowing the reparations only for the following class of damages to wit : a) Damages suffered by property ; b) Damages suffered by persons, in which are included also allowances for invalides, orphans and war widows ; c) For damage arising from special claims, such as were, for Roumania the recuperation of deliveries in virtue of the Treaty of Bnearest, and of the notes of the -Banca Generala«. (Article 259.6). It is useless to discuss the conditions in which the treaties were drawn up, for once they are signed and ratified, we must comply with them. We have however the right and the duty to watch, for them to be equally applied for every body, and in the spirit they were made in. From the beginning we must point out that they were drawn up at a moment of great illusions, when it was thought that they would be carried out to the letter by all the conquered and conquerors. 23 They provided both for the ones as well as the others, reciprocal rights aud obl gations, which must all be taken within their scope and in their tota lity, as being part of an indivisible whole. To modify some of them without a- dapting the others, to relieve some without relieving the others, is both un lawful and unjust. To be able to explain as clearly as possible the situation created for Rou- mania in the matter of reparations, we must examine the c'aims and the obli gations of the Roumanian State deriving from each treaty indiviiually, showing also their meaning and the modifications introduced on their application. SECTION I Treaty concluded with Germany. Treaty of Versailles of June 28"> 1919. The first Treaty which was concluded and ratified was the Treaty of Versailles, signed on June 28 th 1919, (Annex 27) a Treaty which as concerns Roumania, comes into effect on September 20 th 1920, while the delays deter mined therein begin from January 10 1920. This Treaty puts forth the principle of the responsibility of Germany and her allies, for all the losses and all the damages, suffered by the allied and as sociated States, and by their subjects by reason of the war. (Article 23i). Nevertheless considering that Germany’s means are" not sufficient for assu ring completely the reparation of all the losses and damages suffered, the Treaty of Versailles obliges Germany to repair only the damages caused to property and to persons, such as they are specified in annex I of part VIII. (Article 232). But a special privilege is created for Belgium, to be reimbursed lor all the loans accorded by the allies till November ll1918. At the same time it is provided that the totality of the damages which fall to the charge of Germany for reparations, shall be determined by the Com mission of Reparations, constituted in the shape and having the powers speci fied in annexes No. II-VII of Part VIII. The Commission of Reparations must notify to Germany by May I-st 1921, a list representing the aggregate of the liabilities for reparations which Germany must pay in a delay of 30 years, beginning on May I-st 1921, at the dates, and in the manner determined by the Commission of reparations (Article 233 j. The Treaty determines clauses respecting Germany’s various obligations of payment, so as to enable the allied and associated Powers to undertake the restoring of their industrial and economical life, before the final determination of the claims. Germany is obliged to pay, for this object during the years 1919 and 1920, and the first four months of 1921, the equivalent of 20 milliards of marks, gold, in gold, goods, ships, stock or othervise [Article 235). Germany’s economical resources are directly destined lor reparations, under article 236. , Article 237 has a great importance for the reparation question, as it dis poses in.express and categorical terms, that the succesive payments, — inclu ding those mentioned in the preceding articles — destined by Germany, should be distributed by the allied and associated Governments in certain pro portions, determined by them before hand, on a basis of equity ani os each one's rights. By articles 238 and 239 is provided specially the obligation for Germany to return immediately, after the form determined by the Commission of repa rations, the cattle, all kinds of articles, of valuables, carried awav from the invaded territories, when they can be identified on German territory, or on that of her allies. Articles 244 with its annex No. VII provides, as regards Boumania the cession, on the part of Germany of all the rights, privileges and titles of any kind, she had in the Constanfa-Constantinople cable line. Article 259, paragraph VI (financial clauses, has a great importance for Roumania, as it states that Germany confirms having renounced the benefits of all the stipulations inserted in the treaties of Bucarest and of Brest-Litowsk, and the additional treaties, as is specially mentioned in article XV of the ar mistice of November 11 lh 1918. »She undertakes to transfer respectively either to Roumania, or to the -principal allied and associated powers, all the monetary instruments, specie, »securities and negociable instruments, as well as products which she had re- ’ceived in virtue of those treaties--. On this article is founded Roumania’s right of asking Germany to give back to her all supplies and prestations which she delivered on the anticipated enfor cement of the Treaty of Bucarest, including the integral security for the Ban ca Generala notes, which the Germans issued in the invaded territories of Roumania. she Treaty of Versailles also contains clauses, for getting back, through the intervention of the Commission of Reparations, all property, rights and interests which German subjects might have, indertakings of public interest in territories beyond the frontiers of Germany, or of the allied and associated Powers. (Article 260). We will examine this article in all its details in the respective chapter, because the Roumanian point of view founded on the text of this article is, that the property rights and interests belonging to German subjects on the territory of the freed provinces, must be liquidated in favor of the allied State which o'\ ns them, for in this matter article 297 of the Treaty of Versailles, must be applied, and not article 260. Article 296 concerns the question of debts between German dependents, and those of the allied Powers, and the manner of liquidating them, and article 297 is also important by the fact than on the strength ot this article Roumania ma\ retain and liquidate the property, rights and interests of German subjects si tuated in her territory, and for the application of the same the law of June 12 lh 1923 came into effect. We will show in the course of this exposition, how, the Commission ot Reparations, which according to the terms ot the treaties is the mandatary ol the interests of all the allied Powers having rights to reparations, was able lo fulhl its task, and also what modifications and attaints were introduced, b\ sub sequent measures, to the working of this organ, on which, accoiding to the Treaties, depends the whole reparations question. I. DAMAGES SUFFERED BY ROUMANIA As concerns reparations, Roumania is interested that the treaty ot Ver sailles should be applied in the same proportion as for her great allies. In res pect to Germany she cannot be considered, as having limited interests, as some have tried to explain. Germany is the principal debtor ot the reparations due to Roumania, foi the reason that she caused Roumania the greatest losses. In fact the German armies waged war in Roumania, the German admini stration issued »Banca Generala notes, the German Commandment entoiced by anticipation the Treaty'ot Rnearest. It is right therefore that Roumania should have a principal part in the German reparations, based equaly on a principle ot equity, as well as on the special claims she has against Germany. In conformity with the terms of the Treaty, Roumania with the otliei States forwarded in due time to the Commission ot !separations the lists of the damages suffered by her property and her subjects, damages whose reparation comes under the obligations of Germany and of her allies. The list formed after the provisions of the I reaty, and preliminary ju dicial statements made by the Tribunals and special commissions, fixes the amount of the total damages of Rumania at 31.099.853.761 lei gokL(Anex. 42) This figure appears un ler its true light when we remember that 2/3 of the Roumanian territory was invaded and remained occupied for two years and wrung out by Germany, by the application ol the cinical piinciple of the su preme German command, according to which "the chief duty of the military administration in Roumania consists in squeezing the country economicaly, as comp'etely as possible, in the benefit of the Fatherland" 1 ). The consequence of the application of this system ot speculation was the i) The railroad system of 3000 km which Roumanie possessed was'lefl after the retreat of the Germans with only 160 engines. 26 economical ruin of Roumania, after the retreat of the armies of occupation (Ger man, Austrian, Hungarian, Bulgarian, and Turkish); the railways worn out by an intensive circulation, and left without repair and rolling stock *) the tele graph and telephone lines destroyed, the high roads in a state o f ruin, the bridges and technical works smashed, the forests cut down to a state of destruc tion, public and private buildings destroyed or ruined, the cattle exterminated or carried away, agricultural and industrial machines unmounted and carried off to Turkey and Bulgaria all this with the intention of binding Roumania for the future in the chains of economical slavery to Germany. This methodical and unsparing plunder can be proved by the fact that after the armistice, Roumania, formerly the granary of Europe, was obliged to import conserved aliments from abroad, and wheat from America and Ausralia to avoid the famine which threatened the population 2 ) II. SPECIAL CLAIMS OF ROUMANIA In the reparations due to Roumania, we must add another 4 classes of damages, which constitute special claims of the Roumanian State, out of which two are at the charge of our former enemies (Germany) and her allies and the other two at the charge of the allies. These claims are created by : 1. The forced issue of bank notes during the occupation by the enemy, for an amount of 2.173.000.000 lei 2 ) This issue was the means by which the Ger man administration of occupation, took products and valuables out of the country under the false semblance of an effective pavment. In fact by the aid of the »Bancx Generala Romano," the managemenl of which was in the hands of the Germans, the armies of occupation issued new notes expressed in lei, notes having as security a deposit at the Reichsbank consisting of a sum of marks in a proportion of 80 marks per 100 lei. The armies of occupation put into practice their scheme, by which, thanks to this issue, they were en abled to carry away under the semblance of purchases, all the products of the invaded territory, as the redeeming of the notes issued was, in the intention of the hostile Powers, to be put to the charge of Roumania. We must observe that the 2.173 millions issued by the armies of occupa tion, on two third j of the Roumanian territory, represents more than twice the circulation of currency in the whole country at the time Roumania joined the war (August 1916). In fact the monthly issues effected on the eve of the enfor cement of the Treaty of Bucarest (April 1918) are much larger than the earlier ones, as Germany being convinced that the charge of redeeming the notes, b Tli e number of cattle taken out the country was 6.689.202 head of cattle ont of which only the minim number of 45 000 could be got back. 9 The figure indicated tinhe books found after the retreat of the armies of occupation. would fall on the Roumanian State, tried under the semblance of a real purchase, to carry away, as many products and goods as possible.trom the occupied territory. Itoumania in the interest of the unification of her currency was obliged to withdraw from circulation the German issue, reimbursing the bearers with notes of the National Bank. The obligation of Germany to reimburse these notes is beyond discussion, as in fact the Roumanian Government proved in the special memoir published in February 1925 (Annex 43). In fact this issue 2.173 millions went for buying goods and products in the territories gratuitously, The obligation of reimbursing this issue was expressly stipulated in article 19 of the armistice which obliged Germany to remit at once all documents, moneys, securities and paper money, with the issue material, and everything of public interest in the invaded countries And by article 259, paragraph 6 of the Treaty of Versailles (financial clauses) in the last paragraph. Germany un dertakes 11 to transfer respectively either to Roumania and to the principal allied and associated Powers, all monetary instruments, specie, securities and negotiable instruments, and all products received by her in virtue of these treaties «. This obligation of Germany's has a totally special character, and the very presence of this reimbursement clause, in a special article in the armistice con vention, and in the Chapter : ^Financial Clauses* of the Treaty of Versailles, is a proof of the distinction which must be made between Germany's obligation of reimbursing the notes issued, and her obligation for reparations. Germany seeking to take advantage of the interpretation which it would have liked to give to the application of Dawe s plan, applied to the Commission of reparations, to decide on the existence of Roumania’s right, and if they say it does exist, to impute this right on the product of Dawe’s plan. The Commission of reparations by the decision it gave declared that it could give no hearing to this application presented by the German Government. After this decision Roumania’s right remained whole, as it exists under the provisions of article 259, paragraph 6 of the Treaty of Versailles, of the different protocols drawn up at the Interallied Conferences of Genoa, London, and at the last Conference in Paris on January 14 a 1925. Germany being obliged to repair these damages, will necessarily have to find a favourable solution for Roumania, without which no friendly normal relations can be expected between these two countries. The solution must be looked for rather outside Dawe’s plan, for Roumania’s right of recuperation in this instance constitutes a claim of a quite special na ture, and outside the scope of the reparations, but if necessary, inside the scope of Dawe’s plan (annex 59). 2. The anticipated enforcement of the Treaty of B nearest of 1918, in consequence of which Roumania was obliged to deliver large quantities of products, food, cattle, war material, etc. The armistice of november 11 th 191# and the Treaty of Versailles in arti cle 259, § 6 providing Germany’s renouncing the advantages of the Treaty of Bucarest, and her obligation of returning the goods delivered, proclaimed Rou- mania’s right to an integral restitution : The damages caused to Roumania by the anticipated enforcement of the Treaty of Bucarest amount approxiinatively to 1.600.000.000 lei; (Annex44) For the reparation of these damages, the same obligation appears also for Aus tria in the Treaty of S‘ Germain, for Hungary in the Treaty of I rianon, and for Bulgaria in the Treaty of Neuilly. These States, after the negociations car ried on for the adjustment of other matters deriving from the treaties, which were pending, acknowledged Roumania’s right, leaving it only to determine the quantum coming to each party separately *). Besides these two special claims against her enemies, Roumania still has another two claims against her allies, namely. 3) Damages lo the oil industry produced by the destructions demanded by the allies, in the autumn of 1916, taking upon themselves these losses As we showed in chapter I, the total destruction of the Roumanian oil industry, was one of the sacrifices made by Roumania in the interest of the common cause, in order to deprive the enemy of the possibility of supplying themselves with pe troliferous products, a circumstance which strongly diminished their power of resistance (annexes 12, 13). The destructions demanded by the allies, were executed under the super vision of their organs, and the quantum of the damages was estimated both by these organs and by the mixed Anglo-Franco-Roumano Commission (annex 13). the part alone due to the private industry is estimated at about £ 10.000.000, for the State the damages are still greater. This claim of Roumania’s against the allies, is of a quite special character The destruction of the Roumanian oil industry is not a loss inherent to war operations but was provoked directly on the instant demand ol the allies, and after their solemn assurance, shat all the losses that would ensue would be integrally paid back, in order to restore as soon as possible to the natio nal industry, its principal combustible. These damages are of a totally special character, and must be recuperated by the Roumanian State, which on the other hand must compensate the damaged parties. This was the point of view which Roumania urged, in all the interventions we made, upholding strenuously the right of the State to receive this sum, and to distribute it to the damaged parties (annex 14). q Bulgaria, Hungary and Austria, eacli separately, signed a declaration that they were bound to negociate with Boumania, begining on January 1 st 1925, the question of restoring the dtmages caused to Roumania, by the anticipated enforcement of the Treaty of Bucarest, whatever be the result of the accounts, which these 3 States may have with Germany preceding from their negotiations in Berlin. 29 4) The Roumanian Treasure, which was deposited in Moskow. al the de mand otthe allies and under their guard. r l lie elective gold alone in national and foreign coin, belonging to the Na tional Bank of Ronmania, represents a value ok 314.580.456 lei in gold destined, as security for its notes issue, and if we add the value of the other deposits belonging to the Bank, to the Deposits Bank, to the private Banks, the Rouma nian Crown jewels, the private jewels, public and private art collections, pri vate property etc. the value exceds 7.5 milliards (Annex 15). The gold of the National Bank with all the other deposits was entrusted into the keeping of the Russian allied State, upon the advice of our allies, and its de tention, or eventually making use of it, is an act which can find no justification. At the International economical Conference which took place in April-Ma) 1922 in Genoa, our right to the restitution of. this treasure, was recognized by the insertion of clause 13, in the proposals handed to the Russian delegation on May 2 nd 1922. (Annex 16). III. APPLICATION OF THE PROVISIONS OF THE TREATY OF VERSAILLES AS REGARDS ROUMANTA Under the Treaties, the distribution of the reparations should have been operated in the following manner. ' The Commision of Reparations as mandatary of the allied Powers, should have determined the total of Germany’s debt for reparatmns, and after that should have shared between the allies, according to the equity and the rights of each, fixing the delays and the modes of payment for Germany. This principle of equity, without any difference of rank, between the allies great and small, appears expressly written out in article 337 of the Treaty of Versailles (annex 27), in art. 183 of the Treaty of St. Germain (annex 29), m article 167 of the Treaty of Trianon (annex 32), and in article 121 ot the Treaty of Neuilly (annex 36), a principle which is recorded and provided in the Convention of August 17‘" 1916, concluded between Roumama and the allies just before she entered the war (annex 7). Expressly and solemnly mentioned in the Treaties, this principle was soon set aside, as by the Spa agreement signed on July 16"' 1920 (annex 47). the Governments of Belgium, France, Great Britain, Italy, Japan, Portugal, am without the allied States being present, although they refer to article 237 of the Treaty of Versailles, decide that the sums received for reparations will be shared in the following manner. The British Empire France Italy Belgium . . . . Japan Portugal . . . 22°/o 52°/o 100/0 8°/o 0.750/o 0.750/ 0 vav\;v 6’Vv L V ^ < - - v 30 While 0,5 0 /o are reserved for Greece, Roumani.i, the Serbo-Croato- Sloven State and for the others not having signed the agreement, but which also have a right to reparations. By article 2 of the Spa agreement, the reparations to be received from Austria, Hungary and Bulgaria are also distributed, namely : the first half according to the foregoing quota, and the other half is given to, Italy 10 °/ 0 and 60 0 / 0 is reserved for Greece, Roumania, Sewia, and the other Powers not having signed, but which have a right to reparations. By this agreement Belgium receives an exceptional treatment; in virtue of the arrangement of June 16 th 1919, it gets by priority 2 Vs milliards of francs gol 1, while Italy obtains the favor of keeping back, out of the value of property granted under the title cost of the armies of occupation and for reparations, a sum equal to what the Commission of Reparations, would have passed to her account, and therefore Italy is not obliged to issue the bonds mentioned in Article 4 of the arrangement of June 1919, except if, and within I he limit in which her liability for the property granted, should not be covered by com pensation. Article 2 of the Spa agreement places amongst the sums to be shared by the allies also the payments which Italy, Roumania, Servia, Ceko-Slovakia and Po land have to make under the arrangement of September 10 th 1919 (Annex 63) and the declaration modifying the same, of December 8"' 1919 (Annex 64). This agreement concluded without the small allies being called or taking part, was brought before the Commission of Reparations for discussion on Sep tember 10 th 1920, at the meeting under the presidency of M' Louis Dubois. The President by the declaration he read out states that the arrangement concluded on July 16" 1 1920, at Spa, between the Governments of Belgium, France, Great Britain, Italy, Japan and Portugal, gives rise to questions of principle, and presents difficulties of application, on which he personally would like to make all possible reserves. ”On the questions of principle he thinks that he should remind them that according to the terms.of the Treaty of Versailles of June 28"' 1919, as also in fact to those of the Treaties of S' Germain and Trianon, the Commission of re parations is constituted until the final discharge by Germany and her allies, of the debt for reparations, and until the final winding up of accounts between the interested Powers, as being the exclusive representative of those Powers -. The President refers to the formal text of part VIII (annex 2 paragraphs 12 and 23 of the Treaty of Versailles). The Commission of Reparations alone has quality to study the complaints of the interested Powers, to hear the German Government’s observations on these claims, to estimate and to notify the amount of the damages for which Germany owes reparations, to establish the schedule of payments, to determine the dates and the modes of payment of her obligations, by Germany. After a whole series of most interesting considerations on the principles, the president goes on : »in matter of reparations the allied and associated Go- 31 vernments have only calling to fix the proportions, according to which the total of the succesive payments made by Germany on account of reparations, are to be shared between them, and even these proportions are to be based on equity and each ones rights. As regards the application of the Spa agreement of July 16 th 1920, the Pre sident asserts, that it will give rise to many and serious difficulties, hut that he cannot refuse the record of this arrangement, and must request on its appli cation, the aid of the signing Governments, to remain in a spirit of justice and equity. j, In this spirit— Mr Dubois says textually— I personally accepted the for mula of registration worked out by the British delegate Sir John Bradbury«. The flagrant violation of the treaty by this agreement a violation which was pointed out by the President of the Commission of reparations himself gave place in this sitting, to debates on the part of the delegates ot the States, which had not signed. By the debates which followed, by the questions and answers given, it stands out clearly that in the spirit of the Commission of re parations it was intended not to harm in any way by the registration of this agreement, the rights and the interests of the other Powers, who signed the Treaties, but who did not participate or adhere to the above agreement. For any one who wishes to read and to interpret the Treaties in an objec tive manner, the Spa agreement, and the debates which followed, on its iegis- tration at the Commission of reparations, it clearly stands out, that no other in terpretation could be given to this agreement, than that the signing States intend to share between themselves, according to the quota established by them the lump sums due to then, after partially satisfying the claims of the States not having signed the agreement, but being entitled lo reparations. How were defended the rights and the interests of the Powers who did not sign, amongst which is also Roumania, we shall see later on, for that which at the beginning was considered as an agreement, which only concerned those who had signed, later on when its original flaw was forgotten, was considered as an obligation, even for the States which did not sign, that is, the iniquity which should have been avoided, was aggravated. Therefore by the Spa agreement, before determining the German Austrian and Hungarian debt for reparations, a quota of distribution was settled, which took no notice, either of equity, nor of the rights of anyone, nor of the total of reparations, nor of the list of damages, presented by the allied Powers. Such an iniquity could not be admitted without a protest on our part on July 12 th 1920, that is, before the signing of this agreement, Mr Titulescu, Minister of Finance, and Plenipotentiary in the Roumanian delegation, with Dr I. Cantacuzino, president of the Roumanian,. delegation at the Paris peace Conference, handed in an energetic protest, which points out, as clearly and categorically as possible the rights of Roumania, and the violation which is being committed. This protest is the foundation deed of our reparation policy, and we main- ! 32 tain ourselves on this ground, when. Roumania’s quota was fixed at 1 °/ 0 , and when in Paris at the ministers of Finance Conference of January 14 1925 our quota was fixed at 1.10 °/ 0 (Annex 6, art. 7) The question of the German reparation till the London Conference of July August 1924, was as follows. On May 1 st 1921 the Commission of Reparations fixed the quantum of the German debt for reparations at 132 milliards of marks gold, payable in 30 years, a quantum which under the terms of the Treaty, should be divided between the allied States having a right to reparations, »according to equity and the rights of each« As we proved higher up the Governments of Great Britain, France, Belgium, Italy and Portugal, ever since July 16 1920, by the Spa agreement, had fixed amongst themselves, and for the others, without their participation, the quotas of distribution, reserving ulteriorly tor Roumania 1 °/ 0 that is by this, distribution, out of the total of the German reparations of 132 milliards of marks gold, Roumania would have got in a lapse of 30 years 1 milliard 320 million marks gold. The fixing of Germany's debt at 132 milliards of marks gold, was done by the Commission ot reparations, taking into consideration her possibilities of pay ing, and not the total damages to which her obligation for reparations amount ed. Rightly or wrongly, this debt once determined should have been divided between the allies in proportion of the losses and the rights of each, that is after the schedule of losses suffered by each, and in respect of which Roumania for warded a list amounting to 31.099.853.761 lei gold, a list which was not con tested by the Commission of Reparations. (*) Roumania protested continually against this injustice and the endeavours she made to right it are to be seen in the speech delivered by Mr Titulescu, Minister ofFinance in the Bucarest Chamber of Deputies on July 18 1921. (Annex 50). The balance of Reparations as regards Roumania offer the Spaagrement can be summed up as follows. ROUMANlVs CLAIMS IN THE GENERAL REPARATIONS FIXED BY THE SPA AGREMENT According to ai tide I — 1 °/ fi of the German reparations (-) 1200 million marks gold. (1) The schedule presented by the other States amount to the following figures. England 60.049 million francs — Italy 74.230 milion francs France 218.451 » » — Servia 27.715 » » Belgium 36.587 » » (2) The reckonings are made on the data of that time when the quota of 6.5 0 / n fixed for Roumania Grece and Servia by article 1, at Spa leaves it to be understood in an officious manner, that the share .df the Roumanian State would be 1 0 / 0 and or 30 o/ 0 of the second half of the reparations of Austria, Hun gary and Bulgaria See the memom of the Roumanian Government. (Annex 51). I 1 2. According to article 2: a) 1°| 0 on the first half of the reparations owed by Austria, Hungary and Bulgaria (the total amount of reparations due by these States, was officiously es timated at about 12 milliard 60 million marks gold; b) 30°/ 0 of the second half of the reparations owed by Austria, Hungary and Bulgaria 1.800 million marks gold. 3. Special claims: a) Issue of notes by the German army of ocupation 2.173 millions lei gold 1 ); b) Anticipated enforcement of the Treaty of Bu- c a rest 1.600 » n » c) Gold to be recuperated from the liquidation of the Austro-Hungarian Bank. II Boumania’s losses 1. Losses suffered by I he Roumanian State according to the schedule pre sented to the Commission of Reparations 31.099 milions lei gold. 2. Obligations imposelou Roumania by the Trea ties of Saint Germain and Trianon. a) liberation quota 28f> » „ >, b) Value of property transferred 1.104 » * » c) Quota of the Austro-Hungarian prewar public debt') 1.637 kronen Secured debt Towards Austria " Hungary Stog Unseen rt d Debt Towards Austria . » Hungary I 35.814 marks 146.614 kronen . 9.653 | 17.49# koronen gold | 101.556 » paper j 470.805 " gold | 902.351 » paper d) Exchange of Austro-Hungarian cun ency with out any security circulating in the new territories 8.718 mil. kronen . 4.353 million lei. The difference between Roumania’s claims out of the general reparations on one side, and the damages and obligations of the Roumanian State on the other, prove most clearly by the foregoing figures, the negative balance created for Roumania by the Spa agreement. Making approximative calculations, on one side, of the damages suffered by the different allied States, after the schedules presented to the Commission of repa- tions and on the other side, on the claims allowed by the Spa agreement we obtain the following figures. {) Without considering the obligations imposed by the heaties, 2) S ting that the obligations and charges deriving from the treaties, the Proportional percen m tayes quoted here are above the reality. 34 Damages after the list presented to the C. 0. R. milliards in fr. gold Claims allowed by Spa agreement TOTAL Proportion Against Germany 132 mil. marks gold Against Austria, Hun gary, Bulgaria 12 mi lliards milliard M. C. "lobetween damages a claims allowed (*) °lo | milliard M. C. % milliard M. C. British Empire . 64.0 22% 29.0 H°/o 1.3 30.3 47.3»/ 0 France 218.5 52% 68.6 26% 3.1 71.7 32.8°,, Italy 74.2 1QO/0 13.2 25% 3.0 16.2 23.1% Belgium .... 36.5 8% 10.5 4% 0.4 10.9 29.8% Servia 27.7 5% 6.5 10% 1.2 7.7 27.4°,„ Roumania . . . 31.1 i7o 1.3 1% 1.8 3.1 1.0% By these figures we can see that while the percentage proportion between the damages suffered and the claims allowed, varies for the other States from 23°/o to 47% Roumania gets the lowest quota of 10%. And we must not forget that the figure of 31.1 milliards, from which we reckoned above, represents for the Roumanian State only the damages suffered, and the issue of the "Ranca Generala« notes, without adding the other special claims of Roumania’s and the obligations imposed by treaties of Peace. In the light of these figures, the Spa agreement and the quota granted to Roumanian are eloquent enough. The German payments on account of the reparations, after the quantum of the war debt established at 132 milliards of marks gold, were hard to obtain. A first moratorium was granted to Germany in 1922, and only the non acceptation by the Reich of the conditions for a second moratorium which the allies were willing to grant, obliged some of the allies to proceed to the application of the sanctions, by the occupation of the Ruhr on January 11 th 1922, and the direct recuperation of the right of the allies. Towards the end of the year 1923, the Commission of reparations, applying the provisions of article 234 of the Treaty of Versailles consented to reexamine the question of German possibilites and to determine anew her deb t for reparations To this intent, the Commission of Reparations, delegated, on November 30 th 1923, a commission of experts to study the question, and to refer. The London Conference of July—August 1924, was called for settling the appli cation of this plan by the interested Governments. (Annex 57). The plan of the experts modified, and become now Dawe’s plan, puts the question of the German reparations on another footing, fixing a new stage in the evolution of the application of the treaties. In fact, according to the treaty, Germany’s debt was fixed and global, engaging all her resources, without any other right of interference for the Commission of reparations, besides demanding the payment for the amounts and in the prescribed delays. Dawe’s plan destines certain ressources of Germany’s for paying the repa rations, it imposes the forming of a budget, and constitutes organs which within the German administration should assure the payments. In Dawe’s 35 plan. Germany’s debt for reparations is no longer a global and fixed sum, but it varies according to the times, and contains elements of uncertainty (Annex 58, 62). Roumania, invited officially to the London Conference, took part, by her delegate Mr. N. situlescu, who obeying the instructions given by the Roumanian Government, did his best for the Roumanian interests to be de fended within the terms of Dawe’s plan (Annex 55). For the clauses common to all the allies we would have been asked to comply with the general solutions, if the so called Spa quota had been fa vorable for us. For the claims special to Roumania, such for instance as the claim for the ” Ban ca Generala« notes, and the recuperation arising from the Treaty of Bu- carest, endeavours were made for our rights to be reserved for future debates. To this intent, on July 28 th 1924, the Roumanian delegate at that Confe rence, made a declaration (Annex 56) by which Roumania »approves the report of the experts, as an instrument of payment as regards Germany, for the sums already fixed, or to be fixed, proportionally to her capacity of payment, so that the Roumanian claims, both in her quality of an ally, as well as in her other special qualities be recovered". ”The present conference has not to occupy itself with the distribution between the allies, with the question of payment by priority of the privileged claims.... etc, therefore Roumania ventures to lay before the Conference, a memoir to prove her great interest in the reparation problem, and once again to determine her situation in this matter, in view of the day when these ques tions will form the object of negotiations between the allies. The memoir announced in this declaration was presented, and constitutes one of the official documents of this Conference (annex 55). By the application of the London agreement, the Commision of Repara tions declares on September 1 st 1924, the coming into effect of the new plan, and a new organ begins to work, namely »The General Agent of payments for reparations. By Dawe’s plan Germany’s debt for reparations consists in annuities fixed for the moment for a lapse of 5 years, and for amounts as in the annex 52 do cument extracted from the report of the General Agent of Payments, whereas for the future a new distribution is to be fixed. Consequently the London Conference and the approval of Dawe’s plan had the effect that the debt of 132 milliards of marks gold, fixed and payable in 30 years, beginning on May 1 st 1921, was transformed into a variable obliga tion, for a number of years, the present capitalization of which, constitutes a considerable reduction of the debt. The Conference of the Ministers of Finance of the allies, which was held in Paris between the 7"'—14"' of January 1925, had the object of completing the works of the London Conference, fixing norms of distribution amongst the allies, of the payments effected and to be effected by Germany in the course of the first period of 5 years of Dawe’s plan. At this latter Conference, Roumania exposed afresh, her situation regard ing the reparations problem, both at the debates as also by the declaration and the memoir presented by her, and which are amongst the documents of this Conference Annexes 59 and 60). By this memoir and these declarations, Roumania precised her point of view on the quota which she accepted provisionally, and only as »a means of payment* requesting the reconsideration of the whole question, and of her spe cial claims. The agreement concluded, entitled »Agreement regarding the distribution of the annuities of Daiee's plan, January 14"' 1925“ is the last interallied docu ment in matters of reparations (Annex 61). In regard to Roumania it contains the following provisions: By artcle 7, § B, is fixed: 1) A quota of 1.10°/ 0 out of the German reparations, modifying in this manner the l°/ 0 proposed at the Spa agreement, but which precized nothing. 2) Out of Austrian, Hungarian and Bulgarian reparations a quota of 1.10 0 / 0 for the first half, and 20°/ 0 for the other half, that is an average of l0.55°/ 0 out of the total, which is not yet known. Article 23 provides that the payments made by Bulgaria out of the repa rations until December 31 st 1926 in virtue of the Sofia Protocol of March 21 st 1923, will be divided amongst the allied Powers, according to the Spa Protocol, and to Roumania according to the foregoing quotas, namely 1.10 0 / 0 on the first half, and 20°/ 0 on the other half, that is an average of 10.55°/ 0 of the total. For distributing the payments, the allied Governments will take an ulterior decision. Article 27 reserves for the Powers interested in the reparations, all Ger many’s" rights and obligations deriving from treaties, conventions and arran gements, being in force at the time. This article introduced partly on our in- sistance leave the rights which we have against Germany in respect of our two special claims, that is the „Banca Generala« notes, and the anticipated enfor cement of the Treaty of Bnearest, intact. By paragraph 2 of the declaration, made by the Roumanian delegation at this Conference, (annex 59) it is categorically provided that: aj Roumania does not accept but provisionally the application of the percen tage accorded, joining this provisional acceptance to the arrangement of March 11 th 1922, which provides compensations for transferred property and for the liberation quota, and (p) Does not understand any kind of prejudice being caused to the position taken up by her in the matter of her rights and obligations deriving from the treaties, such as she summed them up in the memoir presented in London. In paragraph 3 of the same declaration, Roumania states that she counts on the assistance of the allied and associated Powers for the recovery of her special claims, which were reserved in the former sitting, and begs that, the 37 memoir drawn up by the Roumanian delegation, be inserted as an annex to the minute of the sitting. In the convention which took place between the Roumanian Minister of Finance, Mr. Titulescu, and the allied Ministers of Finance, assembled in Pans (M. M. Clementel, de St -fani and Theunis) amongst other things, much insis- tance was used, for puttmg on the order of the day, the situation created by the application of the treaties, and the anticipated payment of obligations, before the recovery of the rights. We mentioned the acknowledgement which we had obtained from the Government of one of the principal States for the value of the ceded property and the liberation quota to be paid by bonds C. By the declarations, the memoirs and the conversations with many leading personalities on the reparations question the Roumanian delegates, threw a light on the rights and interests of Roumania, in order that at least in one o! the future Conferences the question should be treated in its aggregate form giving its rights full satisfaction. To sum up as far as Germany is concerned, Roumania has a claim oH.10°/ 0 out of reparation payments. What principal this percentage may represent, we cannot know exactly, as the German payments are effected in annuities on Dawe’s plan, which at least for the present has much diminished the debt of 132 milliards of marks gold fixe i at the beginning. Another element which reduces the part accrueing to each ally is the admittance of the United States to take part in the distribution of German reparations, as was decided by the Paris Conference. Nevertheless the part which accrues to Roumania out of the German debts under Dawe’s plan, might be determined in the following manner, by what was calculated for other States. Payments owed by Germany. 1.000 million marks gold from Sept. 1st 1924—Aug. 31st 1925 1.220 » » » for. 1925—1926 1.200 » " » " 1926—1927 1.750 ” ” » » 192/—1928 2.500 " » annually, beginning in 1928, to which sum might be added a supplimentary payment calculated on a »sign« of prosperity, determined by Dawe’s plan. Taking account of the sums necessary for the expenses of the service of the German external debt, amounting to 800 millions marks gold, as well as the expenses of the control occupation etc., the first year’s annuity would be redu ced'to approximately 660 million marks gold, figure at which it will probably maintain itself for each of the other 2 annuities, till the year 1928, when one will be able to reckon on an annuity of approximately 2 milliard marks gold. Without entering into the examination of priorities in the payments of the annuities, Roumania’s part of 1.10°/ 0 would be of about / .260.000 marks gold a year, till 1928, when it would rise to 22 millions. Rouraania has received so far, out of the total amount of German repara tions, a value ol 38.951.353,99 marks gold, for the period before the applica tion of Dawe’s plan, whereas on the basis of Dawe’s plan for the first period, the monthly quota attributed to Roumania is about 580 thousand marks gold. On this occasion we must mention, that another mode of repairing the damages was by »prestalions and delivery in kind*, put into practice by those allies, having frontiers close to Germany, a means by which Roumania could not benefit, on account of her geographical position. Roumania could not profit at the proper moment by these advantages, both on acount of the diffi culties of transport, as well as for the reason that she was offered material of which she had no need, for instance dye stuff, when we were in need of rail way material. The manner in which the chapter of German reparations was applied, and the repercussion of this application in regard to Roumania, who was so dama ged by the war, constitutes an evident injustice which could not pass unobser ved, even by our great allies, who in the belief that they were righting matters allowed us a larger quota in the Austrian, Hungarian, Bulgarian and Turksh reparations. SECTION II Treaties concluded with Ausrria and Hungary and their application The Treaty of St. Germain en Laye Sept. 10th 1919, and the Treaty of Trianon of July 4th 1920, and the decisions of the Commission of reparations By article 177 and the following of part VKI of the Treaty of St. Germain of September 10th 1919 concluded with Austria (‘j, and by article 161 and the following, of part VIII of the Treaty of Trianon concluded with Hungary ( 2 ), the States are obliged to pay reparations, the quantum whereof ought to have been fixed by the Commission of reparations, beginning on May 1st 1921, and payable in a period of 30 years. Roumania is to participate in the reparations, with a quota which by the last agreement concluded on January 11 th , 1925, was fixed as follows: l,10°/ 0 on the first half and 20 °| 0 on the second half. Though the quota of distribution was fixed, still the quota of reparations to which it was to be applied, has not yet been determined. By article 11 of the arrangement concluded on March 11 th 1922, between Belgium, France, Great Britain, Italy and Japan (Annex 54; during the Confe rence of the Ministers of Finance of the Great Powers, in Paris, it was decided (!) The treaty of St. Germain came into effect for Roumania on September 4 th 1920, and the delays provided by the same, begin to run from Joly 1 6th 1920 (Annex 29...). ( 2 ) The Treatry of Trianon, came into effect for Roumania on June 20th 1921, and the delays begin at the §ame date (Annex 32....). 39 that the Commission of reparations, should fix Austria and Hungary’s debt for reparations, in conformity with article 179 of the Treaty of Saint Germain, and 163 of the Treaty of Trianon, mentioning in express terms that whatever be the result at which the Commission of reparations should arrive, the total sum to be distributed between the Powers, taking part in the reparations, shall not be below the sum total of the value of the property transfered by Austria and Hungary, plus 6 milliard marks gold, plus Bulgaria’s debt, fixed according to article 121 of the Treaty of Neuilly. This obligation of fixing Austria and Hungary’s debt, has not been carried out to the present moment, by the fact that Austria by the decision of the Commission of reparations No. 2.400 of February 20'", 1923, and Hungary by the decision of the Commission of reparations of December 1923, obtained an ajournment of 20 years, beginning from that moment, of their obligation of paying repara tions (Annexes 30, 31, 33, 34). Roumania and the succeeding States to Austro Hungary seeing the unani mity of the great Powers could not refuse to adhere to this ajournment, but Roumania realizing to what an extent this ajournment would rehect on her situation, declared formally that she adheres, only on the express condition that the obligations proceeding from these same treaties for her, should also be suspended likewise for a similar lapse of time (Annex 31 and 34) also if these obli gations are not carried out fully in accordance with the clauses of the sie<nt\, Boumania’s obligations must also be completely cancelled. As we see, Austria and Hungary’s reparations were meant, in the intention of the great Powers, on one hand to go for repairing the injustice committed in the distribution of the German reparations by the Spa Conference, and on the other hand to compensate the other obligations deriving for the succeeding State from the application of the treaties. These reparations put off for such a long time, can be considered by us as inefficacious for the restoration of Roumania, so that all hopes and expecta tions founded on them are useless, they create however for us a situation, which we are obliged to take into consideration on account of the obligations which are laid on us, and enforced. SECTION 11 Treaty concluded with Bulgaria and its application. Treaty of Neuilly- Seine of November 27'" 1919 and the Sofia Protocol of March 21 s ' 1923 Bv article 121 of the Treaty of Neuilly of November 27'" 1923, Bulgaria 1 ) is obliged to pay reparations amounting to 2.230.000.000 fmr.es gold, in half yearly instalments, the first beginning on July I s ' 1920. The payments to be made to the Commisfion of reparations, by the interallied Commission in Sofia, pro vided by article 130 of the said treaty. This express and precise obligation, was i) The Treaty of Neuilly came into effect for Roumania on September 4-th 1920, and the delays begin on August 9-th 1920 (Annex 36). transformed by the Sofia protocol of May 21 st 1923 (Annex 37) into an obliga tion of a quite different character, which easing the situation of Bulgaria, char ges in the same proportion the situation of the allies, amongst which Rouma- nia comes in, who was expecting from the Bulgarian reparations, a corrective of the injustice committed at Spa. This protocol drawn up without the partici pation and the cognizance of some of the interested States, ratified on May 1 st 1923 by the Commission of Reparations, stipulates that Bulgaria’s debt for re parations, will be divided in two portions, named A and B for which the list of payments for July 9"' 1923 provides the following conditions. (Annex 38). a) Portion A must be paid in 120 half yearly unequal instalments to go on increasing more and more, of which the first payable on October 1 st 1923 amounts to 2.500.000 francs gold and the last on April 1 st 1983 amounts to 22.697.668 francs gold. This portion A frees the reparation debt of 550 millions francs gold, with 5 per cent interest from April 1 st 1923. b) Portion B constituting the right of the reparation debt, does not produce interest, and is not claimed from Bulgaria before April 1 st 1953. At that date the quantum of portion B will be determined, deducting out of the sum of 1.700.000.000 francs gold all the amounts placed to the credit of Bulgaria, not being the instalments of portion A. For the payments already effected, the fal lowing has been decided: the two half yearly instalments of October 1 st 1923 and April 1 st 1924 have been paid punctually by Bulgaria, and their counterva lue of 964.768,52 dollars, corresponding to 5 million francs gold, has been paid in by the Commission of Reparations, to a provisional fund, until such a time as an agreement on the cost of the armies of occupation and the Commissions of control shall have been arrived at between the al bed and associated Powers, of the one part, and Bulgaria of the other part, in conformity with the decision of the Commission of Reparations No. 2.692. This capital, deposited at the Bank has produced 21.344,65 dollars interest till July 31 st 1924. The Conference of Ambassadors, acting on behalf of the principal allied Po wers who signed the Treaty of Neuilly, decided on July 27 th 1923, that the in terallied Commission of Sofia, was to determine the cost of the armies of occu pation, and of the Control Commissions, and without waiting for the global sum to be fixed, to negociate with the Bulgarian Government for the recovery of these sums. A Protocol was signed on March 28 1,1 1924, between the Interallied Com mission and the Bulgarian Government for the reimbursement of the occupa tion expenses, by a lump sum of 25 million francs gold, bearing 5°/ 0 interest, and payable by half yearly instalments in a period of 10 years. The discharge of the pay lists attached to the Protocols guaranteed by the customs revenues, and the first maturity fixed for September 30' lh 1924. By a Protocol signed by the representatives of the allied Powers, and the Sofia Interallied Commission, it was agreed that any sum recovered from Bul garia under this title should be distributed in the following proportion : Great Britain 44°/ 0 , France 20°/ 0 , Italy 36%. As we said higher up, by the agreement signed on Jan 14' lh 1925, in Paris, a percentage in the Bulgarian reparations, was fixed also for Roumania, by article 7 § B of 1.10°/ 0 for the first half, and 20 0 / 0 for the other half, that is an average of 10.55°/ 0 . The sands representing payments for reparations by Bulgaria, were depo sited at the Federal Reserve Bank in New York, amounting to 1,576,898.69 dollars, out of which the quota due to Roumania amounting to 166,362.81 dollars, which Roumania cashed, and paid for debts of her own at the Bald win Locomotive Works Company, Philadelphia. For the future payments which Bulgaria has to make under the title of reparations, Roumania will receive a quota of t0.55 0 / 0 till the end of the year 1926, when under article 23 of the Paris, agreement of January 1925, the allied governments will have to come to an understanding on a new mode of distribution of these payments. In Annex No. 38, we publish a schedule of the Bulgarian reparations, as they appear after the Sofia Protocol, which modified the Troity of Neuilly, a- gainst which Roumania protested in due time, but useless 1 y. In virtue of article No. 127 of the Treaty of Neuilly she further received from Bulgaria a number of cattle, therein specified 1 ), which only represent an infinites'mal part of the head of cattle carried away during the war, and the occupation, from our territory. SECTION TV Tkevty concluded with Turkey and its application Treaty of Severs of August the 10 th 1920 and Treaty of Lausanne of July 23 vd 1923 By th j Treaty of Sevres of August 10 th 1920 (Annex. 40) Turkey acknow ledged more or lesi the obligation of repairing the damages caused by her, but a subsequent clause of the Treaty of Lausanne of July 24"' 1923 (Annex. 41), completely turned over the whole situation, waiving all pecuniary reparations to the allied and associated Powers. Roumania his now no other right under the Treaty of Lausanne, but to the restitution of property, rights and interests which she will be able to iden tify in Turkish territory (art. 65). CHAPTER III Special lights of Roumania deriving from the treaties In order to he able to examine the situation created for Roumania after the application of the treaties under all its aspects, we must summarily ana lyze the questions referring to restitutions, and to the other rights of the Rou manian State deriving from these treaties. ') The cattle which Ru garia should have returned to Roumania on the bas s of article 127 of the treaty consisted of 60 bulls. 6.09 J milch cows 5.250 horsers and mares, 1.050 mules, 8.400 oxen, 15.000 stheep. 42 SECTION I Restitutions It is also in this same chapter about reparations that the question of res titutions is treated, that is the regaining of the objects carried away from the country by the enemy, and which can be identified in their territory. For our great allies the recovery was much easier, by the fact of the closeness of the frontiers, and the easiness of investigations, so that we can almost say that they recovered almost the whole of what was left in existence of their earned away property. But for Roumania the recovery of the restitutions was rendered harder by the fact that during the first few days that followed the armistice, and when the investigations would have been easier, she had not the right of nam ing delegates of her own, for investigating and recovering, and she was the refore obliged, to appeal to the assistance of the allies, delegates. Later on when national restitution services were created, the identification operat'ons had be come harder, so that the results had been much below what was expected. Our great allies who had recovered the greater part of their property, urged the other States to conclude lump agreements with the former enemies under which in exchinge for global sums they should forego all ulterior in vestigations for identifyind carried away property This attitude was justified by the wish of saving the enemies incurring expenses in keeping up the resti tution services, which operated on their territory. In these conditions Roumania concluded lump agreements giving up look ing fur property which might be identified in the territories of Germany, Austria and Hungary. I. Agreements with Germany. Roumania concluded the first agreement of this kind with Germany in July 1921, by which Germany agrees to give Roumania: one hundred stal lions f r breeding, 2.900 mares, 2.000 big horses, and besides this a credit of 20 million marks (paper) for buying material in Germany. This first agree ment was carried out completely; the credit of 20 million marks paper, was made use of by the War Office for 5 millions, and by the Minister of Communications for 15 millions. In September 1922 the second lump agreement for renouncing the right to the cattle and the tlnroughbred horses which should have been given us under article 238 of the Treaty of Versailles was concluded. On the basis of this agreement, ratified in November 1922, Germany opened us a credit of 4 TOTOO) marks gold out of which 3.70 J.000 marks gold were made use of by the Roumanian railroads and one million marks gold by the Ministry of A- griculture. Negotiations for the third lump agreements were in course, regarding all kinds of restitutions, not being those specified in Protocol D. under the name of »especes«. This agreement does not include rolling stock and non identified industrial material. By cause of the conflict with Germany on the question of the »Banca Generala« notes, these negotiations were not followed up. For the lump agreements with Germany, concluded or to be concluded, the payments will be effected according toDawe’s plan and the Paris agreement of January 14" th 1925 out of a specially destined quota of the German repara tions, and in proportion to the value of the lump agreements. According to the calculation, Boumania was allowed an annual quota of 130.000 marks gold in prevision of lump agreements, which would represent 15 million marks gold, so that the agreement would be paid off in about 75 years. This is one more of the consequences of the situation created for the States, left to the last in the distribution of the damages, comprised under the title of restitutions. II. AGREEMENTS WITH AUSTRIA. We concluded three agreements with Austria in November 1924. 1. An agreement concerning the industrial and agricultural material, and the liquidation of the reserved account. By this agreement the Austrian Government confesses that it owes the Roumanian Government a sum of 512.310 kronen gold, as a compensation for the industrial and agricultural material lefc in Austria, to which is added the sum of 243.000 kronen gold, expenses for repairing, restoring and transporting the machines recovered »d l’identique« as well as the expenses of the Rouma nian restitution service. Therefore the sum total provided in this agreement is 755.546 kronen gold. 2. A lump agreement for cattle. The Austrian Government acknowledges that it owes 175.000 kronen gold, deriving from the estimation at 350 kronen gold per head for a certain amount of cattle and 100 horses which were allotted to Boumania as a quota out of the number of beasts Austria offered to the allies in April 1922. 3. The third agreement concerns the mode of payment of the value of the preceding agreements that is of the 930.646 kronen gold. The mode of payment is as follows: 1° Will be deducted from this sum. (a) The value of railway and other materials which thd Roumanian Govern ment will choose out of the manufacturies of the Austrian Government, if the price is agreed upon. This value is put down at 2 ff).000 kronen gold. (b) A sum of 162.700 kronen gold owed by Boumania for certain transports effected in the interior of Austria. 2 1 The rest of 567.946 kronen gold, will be placed at the disposition of the Roumanian Government for the purchase of goods in Austria, or for pay- ments which the Roumanian Government may have to make to Austrian mer chants or tradesmen. This last sum may be increased eventually by certain rests remaining from points a. and b. The carrying out of the agreements shall be elfected in a delay of 8 months from the ratification by the Commission of Reparations. Tlie ratification of these agreements has been obtained, but the carrying out meets certain difficulties, on account of the organization ok the Austrian finances under the control of the Gommissaire of the S. D. N. and because the question was raised whether Austria’s relief bonds would have priority over the lump agreements. Our point of view is that, as the lump agreements represent restitutions they must have priority over relief bonds. III. Agreements with Hungary. With Hungary the lump agreement of April 16" th 1924 was concluded by which after renouncing the right of investigation, of identification and of restitution provided in article 168 of the Treaty of Trianon, Roumania is to receive in exchange a lump sum of 640.000 lei gold. The payment of this sum in eight equal monthly instalments in one of the following currencies: lei, Swiss francs, dollars or pounds sterling, as the Hungarian Government will elect. This agreement being presented for ratification, to the Commission of reparations,the objection was raised that it could not be paid by the Hungarians before a delay beginning in the year 1927, that is after the obligation ot fur nishing coal for Servia should run out. AGREEMENTS WITH BULGARIA. With Bulgaria the negotiations for fixing a lump sum are in course and we hope they will soon succeed. SECTION If Liquidation of the property, rights and interests of enemies existing in the Roumanian territories. Article 297 of the Treaty with Germany, article 249 of the Treaty with Au tria, article 239 of the Treaty with Hungary and article 177 of the Treaty with Bulgaria, gives Rouminia the right of retaining, and of liquidating the property, the rights and the interests, of German Austrian, Hungarian and Bulgarian subjects, existing within the Roumanian territory,with the exception, of Hungarians and Austrians, having property in the freed territories. In accordance with the Treaties, this liquidation is operated according to the provision existing in internal laws, without any interfence or hindrance on the part of any other external organ. The liquidation of these properties, rights and interests is in course but the result cannot be considered important enough to constitute a reparation, es pecially as the proceeds of this liquidation are destined, according to the terms of the Treaty, in the first place for compensating Roumanian citizens who suf fered losses, by the insolvency of their enemy debitors. We cannot pass this chapter without mentioning that the attitude of the commissions charged with the application of the treaties in this matter, has not always been of a nature to make our task easier. We will quote the German shares in the Arad-Ceanad Railway G° in which the State’s right of liquidating the shares alone was beyond discussion, and notwithstanding, the Commission of Reparations by a wrong interpretation of article 260 of the Treaty of Versailles, interposed itself between us and the German holders of these shares, creating difficulties which might not have ari sen, if the Commission ok Reparations had kept within its role, of simple man datary of the allied and associated Powers, of which also Roumania is one. We will mention even something more, that in contradiction to the terms of the Treaty and its own regulations, the Commission of Reparations invited all the former enemies to the sale by auction, seeking in this manner to avoid one of the objects of the liquidation, which was the economical emancipation of the freed territories. This attitude obliged Roumania to take no notice of these measures, taken in direct contradiction to the formal terms of the treaties. SECTION III Acquiriisp the property,, rights and interests of Hungarian and Austria NATIONAL UNDERTAKINGS OF PUBLIC UTILITY IN THE FREED TERRITORIES Article 211 of the Treaty with Austria, and article 194 of the Treaty with Hungary in the interest of the economical emancipation of the treed terri tories, gave the right to the allies, and consequently to Roumania also, to ob tain on occount of the Hungarian and Austrian reparations the propel H, lights and interests, which Hungarian or Austrian dependents possess in the under takings of public utility in those territories. It was a manner of freeing the new territories from the chains laid on them by the former enem\ States. !. Austria In execution of article 211 of the Treaty with Austria, the Commission of Reparations asked for, and Xustria produced, after long ajournments and con testations an incomplete list of these properties rights and interests, and Rou mania making use of her right intends to liquidate them, placing their counter value to the account of Austrian reparations. 46 A\en it, as we are informed, the Commission of Reparations means to re nounce the right of intervention which it has under the above article still Rou- raania cannot accept to give up a right which is of the greatest importance to her, as it is a question of economically drawing the freed territories closer to their former oecupants. Such a renouncement would have as a consequence the dependence of all the railroads in the freed territories of the companies of theii former enemies, w Inch would constitute a flagrant contradiction to the object of the treaties. II. Hungary I ill the present moment Hungary has not complied with the terms of ar ticle 194, in producing the list of property, rights and interests which the Hun garian dependents had in the undertakings of public utility, in Ardeal and Bu- kovina. Roumania insisted and still insists, on the showing of this list, in order to be enable to exercise her right. The Commission of Reparations has taken no decision in the matter, but Roumania, seeing the interest she has in nationaliz ing the undertakings of public utility in Ardeal, can not give up her right, and insists on the Commission of reparations, demanding and obtaining from Hun- gai \ the list of properties, rights and interests, which the Hungarian depen dents have, in the undertakings of public utility in Ardeal and Bukovina. If the former hostile States, do not present this complete list, omitting to put down these properties rights and interests of theirs in the freed territories, then Roumania, in conformity with the terms of the treaties may take it for gran ted, that these former hostile States, have renounced in favor of Roumania, all the properties rights and interests, not taken down in the lists they should have presented. SECTION IV Property relonging to institutions and foundations of the treed territories EXISTING AT PRESENT IN OTHER TERRITORIES OF THE FORMER Austro-Hungarian Monarchy Articles 266 and 265 of the Treaty with Austria, and articles 249 and 258 of the Treaty with Hungary, impose on these States the obligation of re mitting all properties rights and interests, belonging to institutions, founda tions and collectivities in the freed territories. This formal obligation could not be carried out up to now, on account of the resistance of the interested Sta tes, practically possessors of this property which is not theirs. The negotiations carried on in Bucarest, and the conferences of Vienna and of Rome in 1922 and 1924 have given no practical result up to now. The matter offers great interest for Roumania, as it is a question of pro pel t) belonging to Roumanian foundations, and of which Roumanian natio nals should profit, or cultural and philanthropical institutions of public interest To this intent Roumania is cooperating with the other succeeding States of the former Monarchy and appealing to the assistance of the allies hoping to receive satisfaction for her interests. We hope that when the work interrupted in Rome will he taken up again, Austria and Hungary will understand, when they see the solidarity of the succeeding States that their opposing the division of the immoveable property belonging to the communities and the collectivities is unfounded. We may add that before settling the question of these institutions, foun dations and collectivities no final decision can betaken for dividing the Austrian and Hungarian public debt, as in the patrimonium of these institutions, foun dations and collectivities, besides immoveables and other property there are also governement bonds which being divided must be incorporated in the Rouma nian stock. One of the reasons for which the Con ference of Prague which should have met on July 24 lh 1924 for matters referring to the Austro-Ungarian pu blic debt, was put of was precisely the necessity of a prior settlement of the division of institution, foundation and collectivity property. It is to be hoped that until November 3 rd , date fixed for the Conference of Prague the matter will be arranged. SECTION V The right of Roumania to the rolling stock in proportion to the railway LINES IN THE NEW TERRITORIES The treaties of Peace of Saint Germain and Trianon contain two kinds of clauses regarding rolling stock which formed the Austrian and Hungarian stocks some of these clauses provide the distribution of this stock and the means ot car rying it out, between the newly created States, or those which have acquired ter ritory by the dismemberment of the former monarchy. The others provide the estimation by the Commission of Reparation of the rolling stock which has been divided audits inscription on the reparation account to the Credit of the grantor State and the debit of the grantee State of the value of the material granted to each. The plan of the distribution of the rolling stock worked out by the Com mission of Reparations (art. 318 Saint-Germain 301 I rianon) was ratified by the Conference of Ambassadors by their decision No. 132 of Inly 2 l ’ d 1924. According to this p an Roumania received as stock to be distributed 29 en gines 104 passenger carriages, post and luggage vans 1200 goods trucks, out of the Austrian stock; and 619 engines 1037 passengers carriages post and luggage vans and 5000 goods trucks out of the Hungarian stock. By this distribution however, all the matters reffering to this rolling stock are not yet settled as pro vided in the treaties, for the following questions still await a solution. Ayl The agreement to be made under the treaties with the Austrian and Hungarian administrations for repairing in their workshops, the carriages transferred which needed reparation. 48 B) The distribution of the changeable parts and of the models and drawings necessary for keeping up the rolling stock. C) The distribution of the stock of tools of the workshops of the former monarchy in order that the possibility of reparation in the workshops of the lines transferred, should be the same as in the workshops belonging to Austro-Hun gary in proportion with the respective numbers transferred. D. The division of the expenses incurred by this distribution. The Rouma nian Government is probably the most interested in the solution of this matter (especially those marked at points B. and C.) for the lines of the territories attributed to Roumania, only had workshops of third and very seldom second category—category which was far from corresponding to the importance of these lines ; all the principal reparations of engines and carriages being made under the former rule in the big workshops left in Hungary and Austria. So, after the conclusion of the peace Roumania was obliged in order to make up the want of power of reparation in the workshops in the transfered territories, on the one hand to make disadvantageous contracts with the factories in the states where there was a strong industry, and on the other hand to put her own private industry to contribution for repairing a part of the rolling stock attri buted to her. In regard to the expenses (point D. above) the Commission of reparations not considering itself competent to take a decision referred to the Conference of Ambassadors, which by a decision of May 16 th 1923 and by a letter of Jan: 5 th 1924, decided that the expenses of the provisional Commission (Dent Com mission) should be supported by the States taking part in the distribution, and determined the quota to be supported by each State separately (Roumania 10.17°/o). Whilst as concerns a complaint of the Austrian Government, for the expenses advanced by it, the Conference was of opinion that they should be supported by the same states. The Roumanian Government consented to advance its quota, indicated by the Conference of Ambassadors, for the expenses of the former provisional Commission just as it had consented to advance the expenses needed for its works, demanded by the Vienna Commission making at the same time expressed reserves for reckoning all the expenses imposed by the treaties on the final account; Hie Roumanian Government is of opinion that these expenses are to be exclusivly at the charge of the grantee States, and if the Allied and associated Powers had to contribute to these expenses, in no case can this contribution be limited only to some of the Grantees as the treaties of Peace give the value of the rolling stock which is destributed to all these Powers. Therefore the Rou manian Government is of the opinion that both the sum of 538100 fr : gold advanced by it for the expenses of the Vienna Commission, and comunicated to that Commission, as well as the expenses made by it for the works of the line demanded by the Commission, should be taken into consideration at the esti mation, at the same time as the other expenses of the same nature made by other grantee States, either for being put entirely to the charge of Austria and Hun gary, or for being divided between all the allied and associated States in propor tion to their participation in the quantum of the value of the rolling Stock, which shall be established by the Commission ot reparations (art. 183 a 189 St.-Germain and 167 & 173 I rianon). But at the estimation, the commission of reparations must take into consideration the recommunication on the part of the Hungarian administration of a number of carriages of Hungarian origin which are to be divided, a fact which was pointed out in Dec. 1924 to the Com mission of reparations by the Roumanian and Tcheco Slovak experts. In fact the Hungarian expert himself in this commission acknowlegded and proved that a great numbe • of the newest carriages found amongst the Hungarian stock at the inspection ol Sep. 1920, on the Hungarian lines were not communicated to the commission of Distribution. These carriages ar to this day in the possesion of Hungary instead of being attributed according to the plan of distribution esta blished by the Vienna Commission and ratified by the conference of the am bassadors. 1 ho Hungarian Administration therefore must be obliged to commu nicate those carriages \\ hose number deducted out of the number of carriages found missing in these two inventories (24°/ 0 of the Hungarian and 7°/ 0 of the Austrians) amounts to 15.000 carriages Part of these carriages are not put in the mass to be divided by the Vienna Commission, because they form part of the carriages presented by Italy, Roumania, Yougoslavia and belonging to them by the operations of the war. While the carriages in this list which were on the lines of the Allied States or on the Austrian lines were communicated in due t : me by these States and the Vienna Commission was able to communicate them to the Commission of Re parations as being the property of these three States their exclusion from the mass of carriages to be distributed and not communicated by Hungary is void. These carriages have to be restored to Italy, Roumania and Yougoslavia the rest of the carriages which were not communicated by Hungary will have to be distributed to the so called succeeding States, according to the provisions of the treaty. As regards the question of the estimation, the Roumanian Government lias explained its point of view in the answers it sent to the form of question sent by the Committee of transferred goods. It is convinced that its ans wers will prove the efforts it has made to keep this matter within the strict scope of the real,value of the carriages distributed; notwithstanding the Rouma nian Government will not fail to give proper instructions to its experts, to set forth its point of view in this matter, which is to be examined by the committee of transferred goods in October. CHAPTER IV ROUMANIA’s OBLIGATIONS DERIVE FROM THE TREATIS OF PEACE After we have summarily analized the rights of Roumania, we will go on to examine in this chapter the clauses of the Treaties of peace, which are changed into obligations for the Roumanian State, and the close relations 4 which these obligations have with the rights these same treaties acknowledge formally, for Roumania. It is necessary to point out on this occasion, that at the moment the treaties were concluded, the reparations owed should lia>e covered, and even exceeded the obligations imposed on the Koumanian State, The treaties with Austria and Hungary are the ones which lay obligations on Roumania, the same as on the older suceeding States, without taking into consideration that their situation was different. For Roumania the question of these obligations must only be looked upon as being closely bound with the reparations. "By cutting down the reparations as has been done, it is imposible not to cut down in a similar manner the obligations also, as this would mean crea ting a new negative balance, wdiich would he in contradiction with the vei\ spirit of the Treaties of Peace. This is the spirit of equity with which the reparation and obligation problem must be examined. We will therefore examine each obligation separately, when the same is special to Austria or to Hungary, and jointly when they are common to both Treaties of Saint Germain and of Trianon. SECTION I SPECIAL OBLIGATIONS DERIVING FROM THE TREATY OF TRIANON The dubious text and the erronous interpretation which some have at tempted to give to article 181 of the Treaty of Trianon, determined Hungary to consider that she had a right to compensations from Roumania arising Irom the operations of the Roumanian army in 1919, to quell Hungarian anarchy, operations which culminated in the occupation of Budapest. Such a claim, having no juridical foundation, and in (act quite unjustified, as will be seen from the documents we publish (Annex . . - ) had to give way before the reality, and by the agreement entered upon between the Hun garian and Roumanian Governments, the matter was finally settled by both parties reciprocally renouncing article 181. The arrangement betwen M" Titu- lescu and Count Bethlen on January 25 th 1924, completed by the arrangement between M' Korany and M r Titulescu on March 14 th 1924, was communicated to, and approved by the Commission ol reparations (Annex 35). Although this matter is finally settled we insist on pointing out that the requisitions and carrying away ot material which are imputed to Roumania, could in no case have given rise to claims tor reparations on the pai I of Hun gary, nor could they constitute diminutions in the. common patrimonium of the allies, or enrichment in Roumania s advantage. The truth is that these requisitions and transports were simply: 1) Identical recoveries of materials carried away from Roumania dur ing the war. 2) The recovery of carriages and other railway material accrue!ng to oui lines including the annexed territories. 3) Requisitions for maintaining the army of operation on the field of battle, a§ well as for recovering the requisitions made in our country for the same purpose. By Hungary’s giving up invoking this article, Roumania’s situation does not become better than before, so that the experts who drew up the first text of the report for the Conference of the Ministers of Finance in Paris, in January 1925, made a mistake when they tried to justify that by this renouncement on the part of Hungary, the Spa quota had become satisfactory for Roumania. This interpretation does no move than place, once more in evidence the injustice of tlie quota atributed to Roumania at Spa, an injustice which even the experts of the foregoing report had to acknowledge. In fact the membres of the con ference did not adopt the arguments of that report. (Annex 59). SECTION II Common obligations deriving from the Treaties of Saint Germain and of Trianon Now we will go on to analyse the obligations of Roumania, deriving both from the Treaty of Saint Germain and from the Treaty of Trianon, obligations which are common to these two treaties. I. The exchange of the kronen circulating in the freed territories Article 206 of the Treaty with Austria and article 189 of the Treaty with Hungary, obliged Roumania to withdraw from circulation, and to change in to national money, the kronen issued by the Austro-Hungarian Bank, circula ting in the freed territories. This obligation was carried out to the letter with heavy sacrifices, consi dering Roumania’s exceptional situation at that moment. In fact at that time, the Roumanian frontiers towards Hungary and former Austria were open, and even at certain points not yet determined, so that the inflation, and the invasion of kronen in the Roumanian territory, which was then considered as the most solvent amongst the succeeding States, could not be hindered. This is how we explain the fact that Roumania found in her territory 8.716 million kronen (paper) for which she had to issue and put in circulation 4.353 million lei. The issue of national currency without security, for withdrawing the kronen, contributed not only to the increase of the internal debt, but also to the increase of inflation, which had the result of a disastrous fall of our currency, just at a critical moment when our commercial export balance was particularly in our disadvantage. In exchange of these 4.353 million kronen Roumania only recovered out of the liquidation of the Austro-Hungarian Bank : 47.979.014.36 kr. gold. 32.203.14.01 £ 384.328.07 dolari. 69.329 £ in 10 year bonds. 1.195.200 Fr: fr: „ >, 52 Houmania carried out her obligation of changing the kronen, at the same time as the operation of changing the notes issued by the German army of oc cupation, whereon likewise ensued a suplimentary issue of 1.463 million lei, the security for which is still in the hands of Germany, and also changed the rou bles found in Bessarabia amounting to 1.208 million, the security for which is completely missing, till some arrangement is arrived at with Russia. II Liberation quota The liberation quota is a contribution imposed on the succeeding States of the former Austro-Hungarian Monarchy in the interest of the common mass. We have mentioned the contributions and the sacrifices made by Roumania for the freedom of her national territories, so that the creation of a fresh contri bution under the name of a liberation quota »can only appear as an injustice, following on a war waged for the triumph of liberty and justice. In the same way we must not forget, that at the time when this contri bution was imposed on Roumania, it was considered that the liberation quota would be levies out of the active balance of the reparations, and not out of today’s passive balance produced by the manner the treaties have been applied. The liberation quota is an obligation of a quite exceptional nature, stipu lated outside the treaties, at the time the treaty of Saint Germain with Austria was signed at a time when the fundamental principle of the trea ties—(obligation of the enemy to repair all Rosses integrally) had not yet suffered any modification. This obligation is inscribed in the arrangement of September 10 lh 1919, entitled „Arrangement concerning the contribution to the expenses for the li beration of the territories of the former Austro-Hungarian Monarchy", with the modificatory declaration of December 8 1,1 1919, accepted by Roumania on De cember 9 lh 1919 (Annexes 63, 64, 65, 67). By this arrangement Poland, Boumania, the Serbo-Croato-Sloven State and the Tcheko-Slovak State, are obliged to pay under the title of a contribution towards the charges and the expenses incurred for the freeing of their terri tories a sum up to I'/g milliard francs gold. This sum must be distributed amongst the above mentioned States, in conformity with the norms of distri bution of the Austro-Hungarian public debt, but with the observation that the share of Tcheko-Slovakia is not to exceed 750 million francs gold. By a separate arrangement also of September 10 1,1 1919 with the modi ficatory declaration of December 8 lh 1919 a special treatment was provided fur Italy (Annex 65, 67). The Commission of Reparations in carrying out these arrangements, by a decision in its sitting of November 4 th 1924, fixed the contribution of each State towards this liberation quota as follows : Poland Roumania 225.495.000 francs gold. 235.140.009 " The S. C. B. State 478.035.000 Tcheko Slovakia 750.000.000 Italy 1.388.670.000 59.252.000 By this decision the Commission of reparations decided that the produce of this division should be sent to the Governments of Great Britain, France and Italy, requesting them to answer the following questions: a) If it is expedient to consult the U. S. A ; b) If it is necessary to lodge a formal demand for the issue of the secu rities, as provided in the arrangement of 4919 on the liberation debt ; c) In the affirmative to whom are these securities to be handed. It would seem that by this decision the Commission of Reparation, expec ted the effective payment of these quotas, in contradiction to the terms of ar ticles 3 and 4 of the arrangement mentioned above. In fact article 3 stipulates. -The sums due by each of the States as pro vided above for their liberation, and the value of goods and property of the former Austro-Hungarian Monarchy transferred, to them, estimated according to article 207, Part IX (Financial clauses) of the Treaty of Peace with Austria, will be compensated, if there is room to do so, with the claims presented by these States under the title of reparations, and duly verified. And article 4 stipulates -If the sums due by one or the other of these States, for their liberation, and the value of the goods and properties transferred exceeds the amounts of these claims duly verified, for reparations, that State shall issue in a delay of three months, after the advice duly sent to it, if need be, by the Commission of Reparations, of the amount of the verified claims, bonds for an amount equal to that excess. While article 11 of the Paris financial arrangement of March 11 th 1922 provides : „The Commission of Reparations will fix Austria and Hungary’s debts for reparations according to article 179 of the Treaty of Saint Germain and article 163 of the Treaty of Trianon. What ever may be the conclusion arri red at by the Commission of Repa rations, the total amount to distribute between the Powers taking part in the reparations, will not be less than the total amount of the property transferred by Austria and Hungary, under the Treaties of Saint Germain and of Trianon increased by six milliards of marks gold, and by the debt of Bulgaria as deter mined by article 121 of the Treaty of Neuilly. As soon as they will have been created, a batch of the bonds bearing the mark series C. levied out of the lot of the bonds of that series, for a face value equal to the sum of the debt determined as above, will be divided amongst the 54 Powers taking part in the reparations, in accordance with the percentages fixed by article 2 of the Spa arrangement. If at the time these bonds bearing series C are created, the Commission of Reparations, has not taken the decision, mentioned in paragraph 1, as above, it will distribute all the same, and at once a batch of bonds of series C, levied out of the lot of bonds of that series, according to the percentages determined by article 2 of the Spa arrangement, and for a total face value of 6 milliards of marks gold, besides Bulgaria’s debts. The Powers which shall have received payments in specie or in kind, from Austria, Hungary or Bulgaria, will remit to the Commission of Reparations, for cancelling purposes, bonds of C. series, for a face value equal to the pay ments received. The mode of paying State property, situated in the territories transferred by Austria and Hungary and of the contribution to the expenses of liberation, indicated in the arrangement of September 10 th modified by the arrangement of December 8' lh 1919 will be arranged according to the terms ot the annex hereto. Consequently the Commission of reparations and no other organs even the Government of a great Power, can claim the payment, nor the issue of bonds before the lapse of 3 months from the time the reparations due to us by Austria and Hungary are finally determined, and that only in the event of our quota of reparations being smaller than the obligations which we might have. As we showed in the proceeding chapters the quantum of the Hungarian and Aus trian debt is not yet fixed, and as may be seen from Sir John Bradbury’s letter, the former English delegate in the Commission of Reparations, we can not look to the possibility of such a decision for some time. III. VALUE OF THE TRANSFERRED PROPERTY. According to article 308 of the Treaty with Austria and article 191 of the Treaty with Hungary the goods and properties belonging to the Austrian and Hungarian Governments, situated in the freed territories, are acquired by the State to which the territory is transferred. The value of the goods and property acquired in this manner, will be fixed by the Commission of reparations to be placed to the debit of the State acquiring them, and to the credit of Austria and Hungary, on account of the sums due for reparations. The goods and property, of the provinces of the com munes and other autonomous local institutions as also of schools and hos pitals property of the former Monarchy will be transferred without payment or deduction. For the first time appears in Treaties of peace and exclusively for the States succeeding to the Austro-Hungarian monarchy, a payment for trans- 55 served property, as if a territory - could be separated from all the investments made, for placing it in a position to live normaly in the state of the evolution of modern civilisition. The operations for estimating these properties, both as regards Austria as well as regards Hungary, are in course before the Commission of reparations which latterly has heard the experts of all the interested parties, and has still to give its final decision. In this matter we must remark lhat the Commission of reparations giving an unjustified scope to the idea of »biens et propriety - in the text of article 208, and 191 of the Treaties of Saint Germain and of Trianon, drew up an inven tory of the property which was to be estimated, and in which are included certain items which in no case can come within the notion of »biens et proprietes". In order to illustrate this interpretation we can quote the claim of esti mating and putting on Roumania’s account, the unknown contents of the soil, and the natural products (forests, etc.), which cannot be considered as -Mens et proprietes« except for them who extract them, and make them yield alter they are found. Even in the limits of the principles admitted in the matter of restituting the value of transferred goods by compensation, a broadening of the interpre tation like the one we quoted above, must be erroneous, as on the one hand the quantities of hypothetical goods would be reckoned (salt, me th an gaz metals which might be found) and on the other hand the restitution of the value of riches produced by nature, for creating which the former Austro- Hungarian monarchy did nothing, will have to be restored. Such an interpre tation could-be extended to any length so as to consider as riches to he trans ferred the very agricultural soil or human energ\. In this same inventory formed by the Commission of Reparations, were also put down as transferred "biens et proprietes«, balances in cash, balances in books, private deposits, as claims of Austria and Hungary, without consi dering that such values could not appear in the assets of these states, unless on the one part, these balances had been found effectively at the moment the territories were transferred or if Austria and Hungary should undertake to discharge all the debts and liabilities which these States owed to their na tionals. . . , . , The Roumanian experts discussed the estimates in the inventory which was presented to their examination but they made the reserves on the validity of inscribing in the inventory certain property which could not appear under that chapter. . The Commission of reparations will have to examine and to decide in c ue time on the just objections raised by the Roumanian State. Whatever may be the final estimate of the goods and properties ol Hun gary and of Austria, our point of view is that their can be no question ol an elective payment of the sum estimated, but at the most ol a discount upon all "™" : ""'if-~^^rr -T. ^sT-TJ6= 56 the Hungarian and Austrian reparations, this on the basis of the very clear terms oi art. 208 ot the treaty with Austria and of art 191 of the treaty with Hungary, as well as of the agreements of September 10"' 1919, December 8 th 1919 and March 11 th 1922. 1 he Roumanian Government, from the veiy begining of the estimation of the reparations of this property put forth this point of view before the Com mission of reparations, on this occasion we had to observe that seeing the con tinual reductions and renunciations ocurring during the applications of the treaties, some of the allied States seeing their claims for reparations cut down, tried to recover some of their rights, by an exaggerated estimation of transferred property which would have to be paid by other allied States. This gave rise to the abnormal situation noticed by the Commission of Reparations in the course ot these estimations, where the delegates of some of the great allied States struggled for the increase of the estimate in favor of ex-enemy States. In tact, some ot the members of the Commission of Reparations of the same State explained to us in the course of conversations which we had with them in travelling abroad, the interest which their country Jud in recovering from us that which our former enemies will not pay. Against such an interpretation of the agreements, Roumania must oppose the justice of her cause and the texts of treaties and agreements which have been concluded. IV ROUMANI.Vs QUOTA IN AUSTRO-HUNGARy’s PREWAR PUBLIC DEBT Art. 203 of the treaty with Austria and art. 186 of the treaty with Hun gary impose on the succeeding Stats to assume their part in the Austrian and the Hungarian pre-war public debt according to the quotas and on the condi tions determined by the foregoing articles and their annexes. 1 he provisions ot the treaty make two large divisions in the Austrian and Hungarian pre-war public debt that is: a) Secured debt and ; h) Unsecured debt. According to the works of the Commission of Reparations the quota which accrues to Roumania for her share of the Austrian and Hungarian public debt is summed up in the following table: Towards Austria Secured debt Towards Hungary 11.825.800 kronen poper (capital) 303.370 german marks » 1.700.150 kronen paper (annuity) 71.941.574 french francs (capital) 38.575.000 kronen paper (capital) 67.252.500 kronen gold marks french fr. an £. st. (capita]) 41.712.000 kronen gold (capital) 636.877 french francs (annuities until 1965) 780.044 kronen paper (annuity) 57 Towards Austria Nusecured Towards Hungary 18.815.925 kronen gold (capital) 3.831.156 kronen gold, marks french franch,dutel florins, pounds sterling (capital). 101.548.408 kronen paper 1 ) (capital) 252.785.469 kronen gold (capital) 139.213.000 kronen gold, french francs, marks. L. st. (capital) 1.006.691.592 kronen paper ') (capital) This question of the Austrian and Hungarian public debt is of the greatest importance, both on account of the considerable sums it represents, as well as of the complexity of the different questions which are in connection with this obli gation and is expounded in a memoir of the Roumanian delegate at the Commis sion of reparations (Annexe 74.) From the works of the Commission of reparations for determining, estima ting and sharing the Austro-Hungarian public debt, we see that two very big injustices have been committed towards Roumanie : 1. In the first line for the secured debt, the date of the F‘ of July 1919 was fixed for putting it on the charge of Roumania, although we all know that the property which constituted the pledge of this debt, and which was transfer red to Roumania did not co me into her possession until a much later date. Till the end of the year 1919 Roumania was obliged towage a regular war against Hungary whose armies in a complete state of anarchy refused to acknowledge the armistice and she was therefore obliged to conquer by force the territory which the Treaty of Trianon had given her. The injustice committe 1 by fixing this date of the 1 st of July 1919 was acknowledged in fact even by the Committee of the Commission of reparation which was charged with sharing the Austro-Hungarian public debt. 2. In the second line debts which by right ought not to fall to the charge of the Roumanian State, such as the loans for the Iron gates of the Danube, and the Lemberg-Cernauii-Iassy railway, were inscribed amongst these public debts put to the charge of Roumania. By the Treaty of London (1870) and the Congress of Berlin (1878) a man date on the part of Europe was given to Austro-Hungary, to execute the works at the Iron gates giving her at the same time authority to levy a navigation tax, with the proceeds of which Austro-Hungary ought to discharge annuities on the interests of the loan she had contracted for executing these works. Austro- Hungary passed this charge, which had the character of a European mandate to Hungary alone. We must remark that these works did not interest a single State, but all the States whose boats pass by the Iron gates. It is therefore a flagrant injustice to put the loans necessitated by the works for the Iron Gates exclusively to the charge of Roumania while the navi- *) The kronen paper will be invested in lei, in accordance with the treaties at the si me rate of exchange as was done at withdrawing the currency : that is 2 kronen, iqual 1 len. 58 gation taxes are levied by the Commission at Bratislava, and when these loans have not a territorial character for the loans to be shared by the borderers, but an international character by the fact that all the interested States make use of navigation on the Danube. It is unlawful and unjust that the annuities of the loans should be suppor ted exclusively by the Roumanian State, while the revenues of the Iron Cates are levied by the Danubian Commission. And this injustice was aknowledged later on by the organs which are charged with the carrying out of treaties hut the Commission of reparations did not come back on a mistake which had been committed. In the same way, loans like those concerning the Lemberg-Cernauli-Iassi railway which do not constitute a state debt, and which are not amongst the property transferred to Roumania wee also allotted to the charge of the Roumanian State, as charges arissing out of the Austrian debt, instead of maintaining the first decision of the Commission of reparations, which decided that the settlement of these questions was to be effected by the interested States (Poland and Roumania) and the contracting Company. Besides this those interested in a speedy recovery of the Austro-Hungarian debt by the grantor States, endeavoured to get the debitor States to carry out the obligation even before the formalities enacted by the treaties had been fulfilled. Thus the Innsbruck protocol (Annex 71) lays on the grantor States, the obli gation of beginning the payments and the annuites ol the loans expressed in gold and foreign currency, even before the quota of each State in these loans is deter mined. At the same time, an institution called » Fire Common Cash« is created, which is nothing else but a syndicate of the interested creditors, and which is accorded the right of administering the former Austro-Hungarian debt, which has now become the public national debt of the succeeding States. I hat means that the succeeding States are deprived of a right inherent to the State and an attribute of the State; sovereignty, the right of settling its own debts. When it is demanded that the Austro-Hungarian public debt expressed in gold and foreign currency should be paid in effective gold or in a currency whose parity is nearest to gold (pounds sterling) the former Austro-Hungarian debt gets a more favorable treatment than that ruling the national debt of each State. And what is far more serious is that it is demanded that the Austro- Hungarian debts hould be paid to our exenemies which is quite contrary to ai- ticle 247 of the Treaty of Versailles, aid the corresponding articles of the other Treaties. We must likewise remark that the Innsbruck protocol, only settles a certain part of the Austro-Hungarian public debt, namely that part which re gards the syndicated creditors under the name of the »Common cash-, where the succeeding States have only a single delegate. Practically the Innsbruck Protocol, only gives a provional solution "The Common Cash" having the right 59 after five years of suppress ing or reducing certain advantages granted at pre sent under thai Protocol. The provisions of the Innsbruck Protocol and the organisation of the»Com mon Cash-- reminds us of the treatment to which was submitted the Ottoman debt before the war. Roumania always was a good debitor, whose public debt before the war, was always regularly paid, and will not suffer to be submitted to such a treatment. That is why the Roumanian Government refused to sign the Innsbruck Protocol, because it intends to settle the whole Austro-Hungarian debt in a manner which may be compatible with its sovereign rights. Rou mania on these terms is ready to settle her portion of the Austro-Hungarian public debt which accrues to her. On the other hand Roumania’s obligation to take upon herself a part of the public debt of the former monarchy, can only be looked upon in connection with the reparations which are due to her. Otherwise we would be placed in such a situation that the Roumanian ratepayer, not receiving anything for the dama ges he has sufferedwould be called on to contribute again, in favor of the citizens of former hostile countries, whose debts have been reduced or ajourned. And what is still more abnormal, they would receive a great part of these payments in gold, when it is well known that these States have almost completely anulled their internal public debt after the mon- tary depreciation. If the secured debt can be justified more or less, by the value of the railroads, or other investments existing in the transferred territory, really the unsecured debt has no justifi cation, especially for Roumania, unless it be to throw a valueless claim to be paid by a more solvent debitor. We must hope that the negociations in course, and relating to the interallied debts, will settle this matter in a normal way before the meeting fixed for next November at Prague, and that Roumania will be able in consequence to leave her attitude of reserve. To the chapter of public debt, we must further add the socalled adminis tration debts, which were contracted before the war, by the different admi nistrations whose present seat is in the freed teritories. The situation of such debts, as regards Hungary will have to be arranged between the Roumanian and the Hungarian Governments, in accordance to the Convention concluded on April 16 11 1924. Probably that the same solution will be adopted for arranging the admi nistration debts, in Bukovina, as such a solution was favorably accepted by the Gommision of Reparations. CHAPTER V Roumania’s obligations deriving not from the Ireaiies, but BY CAUSE OF THE WAR, OR OF SITUATIONS CREATED BY THE DISMEMBERMENT of the Austro-Hungarian Monarchy 1) The pensions and the allowances to invalides, orphans and widows in the freed territories, charges taken up for considerations of humanity and ol generosity by Roumania, without there being any grant, on the pait of the former monarchy for keeping them up. How much such a charge burdens and will burden the Roumanian budget will be seen in the schedule of annex 45. 2) The allocations for civil and military pensioners, who have elected for the Roumanian nationality, whose quantum, Roumania out of a spirit of ge nerosity has taken upon herself. In exchange no sum was granted to the Rou manian State, tor covering this expense, and the few funds and foundations, which might have served for these pensioners are not yet freed by Austria and Hungary, who wit hold them without any right. The burden of these charge; 1 will not be known exactly, until after the coming into effect of the new law for the unification of pensions, but in any case we can affirm that it will be a considerable charge for the future budgets. We explain that Roumania makes sacrifices tor a staff, which never brought any service to the State. 3) The pensions, and allocations for invalides, orphans and war widows in the former kingdom. The quantum of these charges appears in the schedule published in annex 45. The compensation of private persons having suffered damages by the war in the freed territories, which would require a sum of about a milliard and a half, which sum ought to have been at the charge of the old Austro-Hungarian, Monarchy this is over and beyond the compensations to private persons having suffered damages by the war throughout the former territory, which damages were proved legally by the special commissions, and whom Roumania, up to the present has been unable to compensate, as the reparations due to her, I,ave not yet been paid. For those having suffered damages in the ancient kingdom, Roumania could not even afford help within the limits of her budget. 5) The Hungarian and Austrian war loan bonds, which under the Trea ties are not redeemable. In tact according to article 205 of the Treaty with Austria and 188 of the Treaty with Hungary, the Roumanian dependents who were underwriters of these bonds about 3 milliard kronen have no call to these compensations. Roumania could pay nothing for these bonds, although from a moral and in'ernational solidarity point of view, she ought to have been placed in the possibility of repairing the damages suffered by these citizens, who very often did not underwrite of their own free will such loans which were destined to as sist their oppressors. CHAPTER VI ROUMANIAS OBLIGATION DERIVING FROM THE »DE JURE" SUCCESSION OF AUST RO-HUNG ARY The territory of the freed provinces was crossed in all directions by rail ways, which in Transylvania are private property, of a length of 3.291 km : and in Bukovina, of 575 km : that is 60°/ 0 of the whole system of railroads of those provinces. 61 The working of these lines under the Hungarian and Austrian rule, was done by the State in the conditions laid down by the then existing laws. By the annexation of these territories, the contracts concluded with the private companies, passed into the hands of the State, with all the charges therein stipulated, charges which for the greater part do not correspond to the advantages these railways produce. It is a question of railways, whose working has always been in deffi- ciency, and of railways which could only be put to some profit through new and important investments, in order to give them the solidity and the neces sary material for an exploitation, and direction towards an outlet in view of which they were not ciealed. A rough idea of the charge which will ensue for Roumania fiom this in heritance can be gathered from the examination of the table of the approxi mate situation of the railway companies worked by the State in annex. 46. These railways both by the bonds which will have to be issued for buying them up, so as not to depend on companies belonging to our former enemies, as for assuring the requisite service of the loan, as provided in the contracts of the concession, represent a heavy burden, which to this days has not been inscribed in the Roumaniant budget. - CONCLUSION Not for the first time did Roumania expose before her great allies the quite exceptional situation in which she is placed by the application of the treaties. Roumania who understood the necessity of solidarity between the allied and associated Rowers, as well during the war they waged for the common cause, as for the time following the war, and indifferently of the damages she suffered, does not ask for more than a treatment equal and proportional to the sacrifices she made. She always urged that the entire complex of the treaties forms an indivi sible whole : rights and duties closely connected, so that, the modification of the one without the mitigation of the other upsets the equilibrium of the whole structure, and threatens to crush under its burden some of the Allies. Any body may see clearly that if a reduction is made in the claims for re parations the obligations must be revised after the same norms in order to avoid the injustice which might ensue for some of the Allies in favor of our former enemies. By the explanations given above, we may see that practically the treaties of peace have determined certain rights and obligations between the allied states and the former enemies. The claims of Roumania in respect of reparations should be recovered in part out of the reparations due by Germany, and in part out of those due by Austria, Bulgaria, Hungary and Turkey. The reduced quota granted to Roumania by the Spa conference was con sidered to have been improved to a certain extent by the reparations owed by the allies to Germany. Thus, besides that Germany ’s debt has been reduced, Roumania is de layed in the recovery of her rights, by the moratoria accorded to Austria, Hungary and Bulgaria, and by the striking out of the reparations due by Turkey. Besides the claims deriving from the obligation of reparations from the former enemies, tbe treaties of peace imposed on Roumania certain obligations; the exchange of foreign money for national money, the restitution of transfer red property, and the quota of the public debt of the former Austro-Hungarian Empire. Now, while the claims against our enemies have been reduced or put off, the obligations of the Roumanian State have not been reduced, on the contrary, they have been even increased and mentained. In this way the succeeding states to the former Austro-Hungarian Mo narchy have been obliged, besides returning the value of the transferred pro perty and of a proportional part of the public debt to pay another debt, called "liberation debt-- in favor of the great allies as a reparation for the expenses of the war, reparations which legally ought to have been claimed from our former enemies. According to the stipulation of t the Treaties, the Roumanian State pro ceeded to change the currency which circulated in the annexed territories, an operation which culminated in an issue of paper money to the amount of nearly milliards lei (in which is included the issue of notes made by the hos tile army in the occupied territory), an issue which constituted together with the keeping back of the treasure in Moskow, one of the real causes of our in flation and the depreciation of our currency. Likewise, the obligations of the Roumanian State, in regard to paying the transferred property and the proportional part of the public debt, have been integrally mentained, and even ordered to be enforced by anticipation by the Protocole of Insbruck as we shall see in the following chapters while the recovery of Roumania’s rights was put off for a long period. At the same time the debt called "liberation debt" was wholy mentained. Now, can it be argued in a lawful and equitable manner that these obliga tions must be mentained while the so called liberation debt is enforced, when Austria and Hungary’s obligations which have not yet been determined, when their enforcement as well as that of Bulgaria’s debt has been put off for later on and when Turkey’s obligations have been annulled ? Can a more favorable regime be applied in a lawful and equitable manner to our former enemies while maintaining the obligations of the allied States without coordinating the obligations of the one with the obligations of the others and without connecting the claims with the debts resulting from the liquidation of the same objects. 63 The consequences of not coordinating these claims and obligations will have a very serious effect on the economical and financial reconstruction of the allied States. And then can we take any account of the economical and finan cial reconstruction of our former enemies, without applying the same regime to the allied States? Taking into account all these considerations, the Roumanian Government demanded strenuously that the obligations imposed on us by the treaties ot peace should be enforced within the same limits as the obligations imposed upon our former enemies. The contrary would mean that part of the obligations owed by our former enemies are to be covered and born by anticipation by the allied States. Roumania thinks that similarly to the coordination of her obligations and claims, the enforcement of the reparations due by Austria-Hungary and Bul garia should be submitted to a similar regime to the one applied to Germany by Dawe’s plan. Her claims being determined and enforced in this manner, Rou mania would be able to proceed to the determination and the carrying out of her obligations. We have given above the balance of the reparations such as it appears for Roumania, immediattely after the determination of the Spa quota, we will show further down what modifications ought to be brought to it after the different steps taken for proceeding to the application of the treaties. L Roumania’s claims 1) According to art. 7 par. b of the Paris agreement of January 14"' 1925 a quota of 1.1°/, out of Germania’s reparations. Taking into consideration the payments imposed on Germany by Dawe’s plan, and the expenses of the occupation, control etc. Roumania’s share till 1928 (besides priorities will be about 7.260 million marks gold From 1928 when Germany will enter the normal period of her payments. Roumania will be able to recover yearly a sum of about 22 million marks gold Therefore the Roumanian State will obtain out. of the 5 fear's payments pro vided in Dawe’s plan about 51 million marks gold. In the hypothesis officiously put forward of the allies claims against Ger many being reduced by Dawe’s plan to o2 milliards ot marks gold, Roumania s share would be 572 million marks gold. 2) According to article 7 § B, of the Paris agreement of January 14 th 1925 Roumania had a quota fixed for her ol 1.1 /<» out ot the first half of the lepara- tions of Hungary, Austria and Bulgaria, and 20 n /« out of the second half, that is about 10.55 out of the aggregate of the reparations owed by these three States. All calculations on the reparations of Austria and Hungary are impossible, because as we showed in the respective chapters, the quantum of the reparations owed by these States, have not yet been determined. At the time the delay was accorded to Hungary, was fixed an advance of 200 million kronen divided over 20 years, out of which Roumania’s share of 20.55°/o would be 2110000 kronen gold. Besides the payment of Austria’s reparations was altogether put off for a period of 20 years, a period during which Roumania has nothing to expect. As regards the payment off Bulgaria’s reparations out of the total of 2.250 million francs gold, a fraction of 1.700 million, was carried over without bear ing any interest to 1953 while the other fraction of 550 millions was divi ded over a period of 60 years. Calculating the quota of 1055 per cent allowed to Roumania, on this last fraction, the share of the Roumanian State is 58.025.000 francs gold. 3. Special claims which Germany will have to pay us. a) The value of the issue of »Banca Generala“ notes 1.463 million lei gold'). This sum represents the notes changed by the Roumanian State, notes which must be considered in gold, seeing that they were given by the armies of occupation tor paying goods and especially corn at the prices fixed by those armies, which were below the real prices; b) The value of the anticipated enforcement of the Treaty of Bucarcst(1918) calculated at about 1.600 million lei. The prestations imposed and taken were reckoned according to the prices fixed by the armies of occupation which were much below the real prices. For this reason the value of the anticipated enfor cement must be taken in gold, considering that the difference between the prices imposed by the armies of occupation and the real prices covers amply the dife- rence beween the value ot the leu and gold in 1918. c) The gold which must be recovered from the Austro-Hungarian Bank, afer the most optimistical expectations Roumania’s part will be about 70 mil lion kronen gold, out of which she has received up to now the following sum 4.797 9014,36 kr. gold, 384.328,07 dollars and £ 32.203.14.1, as well as £ 69.329 and 1.195.200 dollars in 10 year bonds. Roumania’s losses 1. The losses suffered by the Roumanian State, amount to 28.926 million lei gold, (according to the schedule presented to the Commission of repara tions, out of which the value of the »Banca Generala« notes was deducted: 2. The value of the issue of the »Banca Generala-- notes amounting to 1.463 million lei gold. i) The Ilancit Generala showed an issun of 2.173 millions. 65 3. The value of the anticipated enforcement of the Treaty of Bnearest (1918) 1.600 million lei gold. 4. The obligation imposed on Roumania by the Treaties of Saint Germain, and Trianon : A. Liberation quota 235 million francs gold. B. Value of transferred property, approximatively 1.104 million francs gold. G. Quota of the pre war Austro-Hungarian debt which may be summed up as follows : (a) Kronen (paper) 1.156.640.800, that is577.320.400 lei whose coupon is payable in lei; (B) Kronen (gold) 313.313.394, whose coupon is payable in kronen gold. (G) Kronen transformable in kronen paper, marks, francs (French, Swiss and Belgian), dutch florins and pounds sterling 210.596.656, convertible ac cording to pre war parity. The coupons are payable in the currency elected by the creditor, probably in the strongest currency, therefore pounds sterling, to an amount of £ 207.835. The securities transformable in marks, Austrian kro nen (paper), in Hungarian kronen (paper), which although they have no kind of value as principal, have a coupon value worth gold; (d) German marks, (before the monetary reform), 303.378, the coupon payable in the same currency; (E) French francs: 71.941.574. The 3 °/ 0 coupon is payable in francs gold; (I) An annuity of 636.000 French francs till 1.965. D. The exchange of the Austro-Hungarian ^currency, without security, circulating in the new territories (8.718 million kronen): 4.353 million lei. Reckoning the value of the security in gold at 1/3 gold of this issue, the ex change of the kronen represents a charge of 1.451 million lei gold. Counting on the other band that the Roumanian State has recovered so far from the liqui dation of the Austro-Hungarian Bank the sum of 70 kr. gold, equal to 70.5 lei gold, Roumania has a loss under this heading ot 1.453 million lei gold. This would be the balance of Roumania’s reparations, a balance in which we must observe that the other charges accrueing to the Roumanian Govern ment do not appear, as for instance the expenses which we spoke of in Chapter V Roumania’s obligations deriving not from the treaties, but by cause ot the War, or of the situation created after the dismemberment of the Austro-Hun garian monarchy (and in Chapter VI (Roumania’s obligations arising from its succeeding »de jure“ to Austria and Hungary). The balance sheet which we have formed higher up, illustrates by the elo quence of its figures the situation in which Roumania remains alter the 1 iea- ties and their application. The balance of the reparations of the Roumanian State is negative. On this occasion we must once again draw attention on the opinion of some who endeavour to put in the scale the question of the damages soft er ed ’ 5 66 by different States who took the succession, and the increase of the respective territories, an increase which practically ought to have as a consequence a pro portional increase of their financial and economical resources. We must distinguish between two opinions in this matter. First of all as regards the compensation between the increase of the territories and the nega tive balance of the reparations created by the Treaties, we must remark that this territorial increase is owed to the application of the principle of nationali ties, by the annexation of the provinces belonging to Roumania. Now the ap plication of a just and lawful principle as that of nationalities does not imply in the least a reparation policy which must have as a consequence a defficient si tuation to be considered as a corrective of the territorial increase. Besides this such a final situation can only come against the realization of that very princi ple of nationalities, which presided over the conclusion of peace. In the second place as regards compensation between the defficient situation created by the treaties and the increase of the financial and economical resour ces of the new territories, we must remark that for any one who knows the history of Austria of Hungary and of Roumania, the Roumanian provinces in the state in which they were left by their former masters, cannot constitute for the present, nor for many years to come any considerable increase in the public finance line. Roumania in the 8. E. of Europe, at the mouths of the Danube has always been the sentinel of European civilization, and was always the first to receive the brunt and the troubles of invasions from the East. When other countries in the west of Europe had arrived at the complete fulfilment of their national unity, and in their full political economical and fi nancial progress, Roumania was either at war, or was exhausted by the struggles, which her position of advanced sentinel of European civilization in Eastern Europe, imposed on her. It needed a long time for her to constitute herself into a small indepen dent State which represented the idea of progress and national unity for the rest of the Roumanian provinces still submitted to a foreign domination. When the circumstances and the consequences of the late world’s war, al lowed Roumania to complete her national unity, she is not at all in the plea sant situation of heirs at law whoenyoy with out any cares the riches they have inherited. The freed territories by which the ethnical and geographical unity of Rou mania is completed, created also great charges rising at the same time from a past which was always at her disadvantage, as well as from obligations which her new situation impose on her. During the first few years after she' was united to Transylvania, Bucovina and Bessarabia, the revenues of the former territory had to be partly used for the maintainance of the new territories, which in the state in which their former masters had left them could no more provide for their own needs. For the economical adaptation and in order to catch up lost time Roumania will be obliged for many years to make sacrifices out of her own resources, width she might have turned to another destination and to make supplementary, efforts. The railway lines in the freed territories for which she has to pay heavy debts by assuming the Austrian and Hungarian public debt can only be put economically to use afer new and important investments for these lines to be united to the lines of the former territory in order to go towords their na tural outlets. I he organisation of her Jluvial and more especially of her maritime ports will necessitate great expenses before they are in a state to suffice for the traffic which will necessarly be opened by a free and international regime of the Da nube and the granting ol the mouths of this river to its natural hinterland. she present system of Roumanian railways consists in four different bran ches formed by the lines of the former States which included provinces which are now freed. The Hungarian lines in Transilvania going towards Pest and Fiume, the Austrian lines in Bucovina going towards Lemberg and Vienna, the Russian lines in Bessarabia going towards Odessa and Kiew must all be connected with the lines of the lormer territories which are the only ones leading to a normal outlet namely the Danube and tho Black Sea as well as with the new frontiers of the neighbouring States established by the late war. In regard to this we can give as an example the situation in the north of Transilvania where the railway connection between the towns is made by cros sing the Tcheco Slovak territoires, situation that cannot be admitted any lon ger, and for the remedy of which great expenses are necessary. For the complete unification of the lines we will have to build at least 2.000 km. of new lines. Economical and Financial Institutions which had their basis in the com plex relations in the capitals of Hungary and Austria can no longer be of any use in the new situation unless they are connected with the natural econo mical financial lines. Besides her political economical and financial development Roumania must also think of the development of intelectual culture she must make great efforts and as speedily as possible for the intellectual progress not to feel too much the lost time during the foreign occupation which prevented a larger mass of the population from developing itself according to its aspirations. Institutions of Roumanian culture, of course must be created in proportion with the present situation of the Roumanian population which will necessitate new charges over and above the heavy burden which we inherited of keeping up the institutions we found and which had profited to the former masters. For instance in Transilvania the Roumanian population which was over 3.500.000 only had three upper schools whereas the German minoritary po pulation had nineteen, and the Hungarian population had 50 big schools for a nunber of 1.300.000 inhabitants. 68 Since 1919 till 11924. Roumania created nearly 5000 lower schools 73 normal schools and 129 upper schools; she reorganised 3 Universeties a law Academy a commercial Academy and created o politechnical school in the new tern- tones. From what we have expounded higher up we see that the economical financial political and cultural adaptation of the freed territories necessitates time and expenses rendering the economical benefits of the new territories much smal ler than what it might be after the complete organisation has been obtained. When everything is to be done over again and adapted to the new situa tion, it is easy to understand that the income of the new provinces will not contribute for many years to come, to compensate Roumania for the obligations imposed by the treaties. Roumania accepts all the charges which accrue from the increase of her territories, but does not understand that it is lawful or equitable that the^e charges should be increased by a policy that is heavier than that applied to the hostile states. PART II THE INTERALLIED DEBTS FOR FINANCING roumanlVs WAR Conserving the same norm adopted in the first part of this report v»e will now examine Roumania’s interallied debts for financing the war during the two periods during which the action lasted. The period of armed neutiality, the war period and the after war period. CHAPTER I armed NEUTRALITY PERIOD 1914—1916 When the war was declared in 1914. Roumania by her neutrality had cut out, for all those who could see clearly her line of conduct, in the future policy which should agree with her most vital interests : the realization of the hopes of a race divided under three masters. It is evident that the policy followed by her until then in the orbit of the Triple Alliance, on account of the attitude of Russia, placed her in a very hard situation from the point of view ot the material with which the arrm was supplied, as well as from the point of view of the financial sources which were absolutly indispensable for a war, whose duration could not be precised. Although she did not mobilize her army from the first moments of the general war she had to proceed quickly to a systematical mobilization of the ressources of the country, so as to be able to cover the expenses ol concentra ting her forces along the frontier so as to prevent encroachments both for stra tegical or any other reasons. The display of these forces represent the first ma terial sacrifices Roumania made. Parellel with the priceless tribute of her neu trality during the period from 1914 to 1916. SECTION I roumania’s contribution for the cause of the allies Besides the material sacrifices which Roumania made for preparing the war and concentrating her forces along the frontiers, she was able to contribute to a certain extent to the economical blockade which the allied Government had laid for the Central Powers. 70 Our preparations which could not be objects of public discussion, but which were carried on with great activity, could not be indifferent to the public opinion of the Central Powers, and more especially of the leaders of the war, who besides their military action were attempting a parallel action of buying con sciences, and of creating a current of public opinion favorable to our joining the war, side by side with the Central Powers. Besides this action which was carried on by a whole series of propaganda orga nizations which distributed pamphlets and illustrations for the glorification of the Central Powers, but which were founded on the corruption of consciences; even the means of suppressing publicity by buying up some of the existing pu blications, determining them to back their policy, were endeavoured. The Roumanian nation did notj let itself be led astray by momentary sucesses, nor could it deny its seculary hope in the unity of the nation, by rash adventure. At the same time as this written propaganda, the Central Powers made an attempt in an economical direction, trying to get hold of the agricultural products and in this way to avoid the blockade of the allies. The German Government intended to make through its agricultural orga nizations in the country, an agreement, in force of which the Consortium which it would create in B nearest, would buy up only from the big land owners, whose views were favorable to their action and which therefore were mar ked out by the propaganda office. Evidently that such attempts placed the Roumanian Government in a very delicate situation, because it they did not agree with the actions of the Central Powers they could not prevent the agriculturers from selling their crops. As the first counter action the central commission of export was created, by which the State monopolized the sale of corn. Two contracts were concluded with the Central Powers, and one with the British Government for the purchase of Roumanian corn. Thanks to this last contract Roumania though neutral consented to with draw large quantities of her products from their former normal outlet which was towards the Central Countries, and thus contributed to the blockade of her future enemies. Turkey who at the time of this contract was already at war, side by side with the Central Powers, as the first service which it could do for its allies, blocked the Straits of Constantinople; in this manner the corn bought by the British Government through the office created in Bucarest, could not be exported according to the contracts and was deposited in the ware houses of the railway specially transformed for the purpose under the clauses of the contract. Thus this corn being purchased became the property of the British go vernment and had to await the favorable moment to be transported or resold But it is a fact that the principal object namely an economical blockade ope ration against the Central Powers was obtained and nobody can say that so far as was possible, the good will and the assistance of the Roumanian government was not placed at the service of this cause. 71 Roumania’s action in the neutrality period, shows in a concrete manner the nature of her participation in the war on account of her exceptional geo graphical situation Though in a formal manner she was not yet at war still she was considered as an ally, and loans and war material were accorded to her in spite of the difficulties which the great belligerant Powers had'to meet. This was on the one part a manifestation of confidence in the action of Rou- mania who did not conclude the treaty of alliance till August the 4 lh 1916. On the eve of joining the war and on the other hand an acknowlegement that though the geographical situation of Roumania did not allow her to approach the armies of her future allies she was nevertheless a factor which by her very reserve contributed from that moment to the common action. This was the situation till August the 4 lh 1916, when Roumania took a final descision and concluded a treaty of alliance and a military convention of August the 4 lh 1916. Which only preceded her entering into action by ten days. SECTION II. THE FINANCING OF THE ARMED NEUTRALITY PERIOD (1914-1916) The fruits of our economical prosperity before the war and a healthy po - licy ol securing the issue of the National Bank enabled the Roumanian State to contract four loans of a hundred million each at the issue Bank (annex 24) for the need of the preparation of the army, as follows : On September 12"' 1914 a hundred million lei. On December 20"' » » » » » On June 15 st 1915 » » » >, On December 19 st 1915 » » » » So it is to be re mar Iced that for these four loans the State paid to the nati onal Bank a metallic security of ninety nine million elective gold proceeding for the greater part from the custom duties on export levied in gold or from the con tracts for cereals which we will speak of lower down. Subsequently the value of these four loans was reimbursed to the issue Bank from the proceeds of the four hundred million "National loan-- ot April 1916, this loan was a manifestation of the solidity of this financial organization but which in any case was not sufficient to support the expenses of a war even in the preparation period. For this object Roumania was obliged to apply to te financial aid of the triple Entente nations. 1. Loan in Italy on December 10 st 1914 the »Banca dltalia* on the applica tion of the national Bank of Roumania consented to open the Government a credit up to the sum of 10 million Italian lire in exhange of treasury bills to the bearer with a maturity of twelve months at the most and an interest of 6.5 o/o (Annex 2). The proceed of this loan went for covering orders necessary to the ar my till April 1915' 2. Loans in England the Bank of England consented on January 20 sl 1915 through the intervention of the English Government to grant a loan of five million pounds sterling (Annex 3) The fact that England being in war consented to grant the foregoing loan although there was no engagement to guide us towards entering the war, proved that they relied surely on our entering into action and the proof of this belief was not shaken by any kind of suspicion, is the fact that the proceeds of this loan, were used in expenses for the army as well as for other expenses of the State, which otherwise might have spent this money as it would have thought necessarv for all the State requirements. It was therefore an assistance granted to an ally which was preparing for war, and the fact that this advance was made us »a decouvert« proves that no other interpretation can be possible. Examining the use made of this advance, until Roumania entered the war we see. for the requirements of the army £ 3027769. 9. 8. for the other departments ^ 1027667. 1. 1. I). The first advance of 6ve million pounds sterling being spent, the English Government consented, by the Bank ot England to a further loan ot £ 7.000.000 on October 14 th , 1915. (Annex 4). From the examination of the terms of the agreement we see that whereas for the first advance there was a condition that the expenses to be effected were to be made with the assent of the English Minister of Finance, this second sum is granted without any kind of reserve, as this loan had a character ol allied solidarity. From the details appearing below, of the use made of these sums it clearly appears that they could be spent in all the allied and neutral countries for covering the expenses of our preparation and even for expenses ol other depart ments. The proceeds of this loan as well as the rest of the loan of five million pounds sterling mentioned above, was spent before the general armistice. III. LOANS IN FRANCE Like the English Government, the French Government on March 8' h , 1915 (although in war) consented in another form, that Roumania, in view of sup plying herself with war material and ammunitions should place her orders in i) For the detail see the general account published in the conclusions. 73 the establishments which were working for the supplies ot the French army. (Annex 5). If we examine the hardships which France had to overcome at that time when the whole brunt of the German armies, made one think that the victory was not certain, there is no doubt that in such circumstances and as a justifi cation for its future hopes, the French Government gave this assistance to the Roumanian Government to prepare its army. From the examination ol the Convention we see that the Roumanian Go vernment had to make an advance of 25 °/ 0 in cash, out of the whole supply, and this sum was produced by the English loan and with the knowledge ol England. There is therefore no doubt, that although at that time there was no coor dination of the financial action ofthe allies, nevertheless the fact that they consen ted that out of a loan accorded to Roumania, advances were to be paid to the French Government, for a contract of supply of ammunition, this is a sure proof that neither of the Governments doubted the decision that Roumania was to take subsequently, and that these advances were real interallied war debts. A second contract was entered on with the French Government on January 18th 1916, also for supplies of ammunition for a sum of 28 million francs (Annex 6). The conditions of payment were identical to the first contract, and out of the English advance, was paid to the French Government, on account ol both contracts. French francs 23.707.000, while the rest was passed to the general account of the war debt. These contracts though carried out lor the greater part the, war material could not be ready before our entering the war, and their liquidation had to be effected according to article 1 of tiie military convention, based on the treaty of alliance of Aug. 4, 1916 (An. 7). Thus in this period the financing of the war, was effected by: (a) Internal loans; (b) Loans from the future allies. (c) Ry the purchase of cereals by the English, an operation which en trusted to Roumania, neutral at that time, the corn bought by the English, but not transported yet, on account ol the blocking of the Dardanelles. 74 CHAPTER II THE WAR PERIOD (1916—1918) SECTION 1 ROUMANIAS CONTRIBUTION According to the terms of the treaty of alliance and of the military con vention, on August 14th 1916, Roumania declared war on Austro-Hungary her troops taking up the offensive along the whole frontier of the Carpathians. We will not analyse the military operations as they followed their course, but it is certain that the spirit with which Roumania rushed into the war, was of such a nature, that she spared nothing out of her armed force, though practi cally her military preparation had not arrived at a sufficient degree of perfection and of fitness at which the Germans by their experience of war, and their special training in that line, had arrived. This first period of the war was a series of heroical deeds and sacrifices, for which the Roumanian soldier spared nothing. The central Powers were obliged to send important forces and all their mo dern war apparatus, to conquer inch by inch and after hard struggles the moun tain passes. And probably the advance of those forces would not have had the same success, if the action at Salonica had been carried on in the conditions laid down in the treaty of alliance, and if the allies on whieh we counted more espe cially, had not aggravated and impeded our military action by the slowness of their movements. The countrieswhich have not experienced the exodus of the retreat, will not be easily able to appreciate the wisdom of the Roumanian nation, when it gave up to the discretion of the invading armies, which were affrighted by the specter of famine 2 / 3 of the richest territory of the country. If we add to this that all the institutions on which the supplies of the army were based for renew ing its stocks were centralized in Bucarest, any body can see what endeavours had to be made, to dispel the despair which had begun to take hold of all, in front of this undoubtable reality. I. The Brittanic corn. After the retreat of the troops, the corn which had been deposited in spe cial warehouses built and arranged by the Roumanian State, on the demand of the British Government, would have fallen in to the hands of the enemy. Out of this quantity of corn, the, following quantities were transported and sold : 59 truck loads to the Russian armies, and 18.000 trucks for the needs of the Roumanian army, the countervalue of which must be considered as a regular war loan granted to Roumania especialy lb at a moment when this stock of corn had to be put in the impossibility of fal ling in to the hands of the enemy. 23941 which fell into the hands of the Germans, after the retreat of the troops. But a part of these truck loads was burnt by the Roumanian armies, to gether with the barns belonging to the railways, where they were deposited, according to the dispositions taken by the English delegates, and another part by the Russian in the course of the retreat operations after the fall of Bu- carest. (An: 9). It is right to mention that a part of this corn spoilt by the petroleum poured over it, was used later on by the enemy as food for the Roumanian pri soners camps, in order to show, that the Roumanian Government in its retreat, not only did not think of the fate ot the prisoners, but even did all that lay in its power, to render it impossible to supply them, by spoiling the corn, which had remained. After the general armistice of 1919, on the demand of the British Govern ment, the value of this corn was divided in the following manner. a) That which corresponded to the truck loads sold to the Roumanian army, on its retreat to Moldavia, was paid to Roumania in treasury bills subse quently consolidated in 1922, together with the other treasury bills. b) In the same bonds was passed the value of the English corn, left in the hands of the enemy, or destroyed with the agreement of the British Government, on the retreat of the Roumanian army into Moldavia. c) Only the value of the corn sold to the Russian army, remained to the charge of England. II Destruction of the oil industry Roumania did more. At the demand of the allies, she sacrificed, by des troying it, her oil industry. (An. 12 & 13). The sole object of this destruction was to deprive the enemy of one of its most important arms, and though it was a very great sacrifice which Roumania was making for the cause of the allies, she did not hesitate a single moment, nei ther did she doubt that one day or another the damages produced by this mea sure would be repaired by the allies as they formerly promised to do. For this object in Nov. 1916 on an intervention of the representatives of the allied Powers, which through Sir Barclay, the English Minister applied to the Roumanian Minister of Foreign Affairs telling him that the damages caused the by this measure would be repaired by the allies (An.12) and demanding the destruction of all the petroleum works, of the petroleum and the means of trans porting it, as well as burning the deposits of oil and derivates in the refineries and the store stations in the whole of Muntenia, and Dobroudja. In the districts 76 of D&mbovija, Prahova and Buzau 1677 wells, of which 1047 in a state ol pro duction, 26 petroleum refineries the reservoirs at the oil fields and the factories with 8270 tons of oil and of oil derivates, with the whole plant were destroyed. The riches represented by the petroleum industry was the reflection ot the development of our State, and the principal store of energy of our natio nal economy, as it was the principal national combustible. Even it immedia tely after the war, we would have had the neccessary sums for restoring to work ing order all the destroyed oil-fields still it would have required a long time, and nobody can say that our national economy did not suffer, more than the da mage represented by this destruction, especially if it is considered what sum is allowed us for reparation and what sum would be owed to us. (An. 34). The production reduced almost to nothing in 1917 only just began to rise in 1918 without attaining however 50°/ 0 of what it was before this des truction. In 1925 six years after the war and with all the efforts made even bv the occupation army of the enemy it has hardly attained the prewar pro duction. This destruction created a special claim of ours onthe allies, arising as it did from a sacrifice made for the common cause. It cannot be included there foie in the policy of reparations and of the treaties, but must be taken into con sideration when we talk of our rights and obligations both arising from the treaties or against the allied States. By its very nature this claim has a pri vileged character. The central Powers weakening their other fronts, concentrated the whole action of their forces against Roumania, and the occupation of Bucarest was to be a mirage, which on the one hand would give their subjects the idea that the war was soon to finish by the complete rout ot the allies, and on the other hand, that they would be able to execute the whole plan which had been experimented a long time before in the other countries which had fallen under the German occupation And fortunately in 1916 the Rouma nian army reduced from the beginning of the war to its proper forces, as the Russian army did not arrive except at the monnent of the retreat, was obliged to choose, with an aching heart a new point to lean upon between Focs-sani and the Danube in the Galatz region (Nomoloasa- Focyani). The exodus of the retreat during the hard winter 1916 — 1917 are exemples of the sacrifiice which we can only explain by the unshakeable faith of the nation, that the struggle in which it was engaged could only lead it to victory. SECTION II THE RETREAX TO MOLDAVIA. Retired in a corner of the country which represented ^ of the area of the territory, the Roumanian State began to reorganize its army placed in 77 different camps of concentration, most of them lacking sufficient shelter, rava ged by diseases brought for the greater part by the Russian armies, the Go vernment and the General Staff watched sleeplessy over the reorganization of the fighting unities, assisted also by the allied military missions, and more especially the French one. The difficulties of reforming the army were increased on the one hand, by the transports which arrived very slowly by Archangel, and on the other hand by the Russian army, in which the dissolving germ of the revolution and of disorder had begun to appear. In such a situation the Roumanian troops, had no. effective assistance to expect from their Russian ally. In the summer of 1917, the Roumanian troops had to confront, on the one hand a most powerful offensive prepared by the Central Powers, and on the other hand had to struggle against the complete falling off of the Russian which rendered the operations of the enemy much easier. Neither the propaganda carried on parallel with the German offensive, could shake for a moment, the faith of the troops in their strength, nor the be lief that their leaders would lead them to victory. In the struggles of Mara^ti and of Mar&§e§ti, the Central Powers suffered a final infringement without any hope of gaining a succes on the Roumanian front, which remained fixed definitively till the end of the war, though the Russians had abandoned the fray The allies influenced .by the Russian suggestion, urged us to evacuate and to reform our army in Russia (Kerson) but the Roumanians proved to be better judges of the reality of the situation, and they maintained the line of Iront from Galatz to §arul Dornei, although some of the a lies considered the thing almost impossible. The Roumanian Government decided to carry on the struggle to the end, and gave order for assuring the Treasure of the National Bank as well as all the other artistical riches and objects of price which the Banks and Institutions had brought to lassy. This provisional assurance had to be finally effectuated by sending the Treasure to a safe place in Russia. As, with all the assertions of the Russian provisional Government, that by the fall of I zarism the founda tion of the State would suffer no change, the Roumanian Government still he sitated, the representatives of the allied Powers, assured il that it might carry, without fear. The treasure to Russia, as she was still our ally. In this \\a\ the treasure and all the riches of Roumanian Art and all moveable stock and objects of price were sent to Moskow and the customary protocols were signed (An: 15). After the struggles at Marasesti the Russian defection having had dange rous consequences, the Roumanian Government was obliged to proceed with the greatest prudence to disarm and to send towards the frontier appioxi- matlvely a million meu which had consumed the last reserves ol food in Rou- mania. The military operations after the struggles ot Marasesti having ente red a period of calm, the Central Powers which had done all that was in their 78 power for the Russian defection to be as complete as possible, could not consent that a situation which gave the impression of a final defeat on the Roumanian front should go on. Taking advantage therefore of the Russian defection they im posed an armistice on Roumania who was completly cut off from her great Allies without the possibility of renewing her war stock, and completely abandoned by her great Russian ally and quite incapable of meeting with her proper forces a new attack of the enemy. With the knowledge of her Allies site inclined her self before the events and although she never doubted that the victory would be on the part of the Allies, she had no other thought than to be able to conserve a quantity of war material which would be necessary for the new mobilization which was evident in the future. So these are the circumstances in which the armistice and the peace imposed inBucarest on April 2, 1918, came to take place. Complety exhausted in all her ressources, without any effective assistance on account of her geographical isolation from her Allies, with out the possibillity of making an effort for a last sacrifice, Roumania thought that she still was useful to the cause of the Allies, and bowing herself before the draconian clauses of the Treaty of Peace imposed on her, having nevertheless the conviction that this was only a temporary situation that would not last long, the territory occupied by the troops of the enemy represented two thirds of the area of Rou mania had been completely laid waste and sacked by the Central Powers, accor ding to a well established plan decided in Berlin in October 29 th 1916, by the counsel of the group that represented the Central Powers. (Anex 21). The decisions of this counseil besides fixing in all its details the plan for speculating the occupied territories had also the subversive object intended to rob the population and the country of all her riches, giving the impression that everything which is carried away, is paid for and that the population loses nothing. So was created a means of payment by the bank notes issued by the army of occupation with the assistance of the “Banca Generala Romana- a former branch patronized by the direction of the Disconto Gesellschaft in Berlin. (Anex 43). The German military economical organization acquired from the inhabi tants (it is well under stood for prices imposed, and far below their real value) all the products of their labour sending them towards the Central Powers coun try and parellelly with this economical speculation the military administration gave them repuisition bonds or obliged them to underwrite Hungarian war loans. The issue of notes made by the enemy is the first stroke given to our issue institution as in the clauses of the counsel of Octobrc 29"' 1916 it was stipulated that at the conclusion of peace the reedeming of this issue should be left to the charge of the Roumanian Goverment. The peace of Bucared provided in its clauses regular detailed organiza tions of modern slavery, the whole population being obliged iso work for its conquerors of the moment. In the first place all was done for the blow widely was given to our first 79 issue institution, the National Bank, by the issue of notes of the Banca Generala Rom&na, to be extended by the clauses of the treaty, stipulating: 1. That the account of the Bank at the Reichsbank in Berlin of 180 million Marks which was the price of the corn sold and consumed by the Germans, should pass to the Roumanian Government. 2. The participation of two German Commissaires in the central adminis tration of the Bank, and one in each branch office of the bank with large rights of control. 3. The reception for loans, of requisition bonds without indicating any limit. 4. The creation of a central office for devizes with two German Gommis- saires having the right of deciding devizes operations. It is evident that the National Bank seeing in what a hard predicament the State was, and imbued with its duty of granting it every possible assistance within the terms of the law and of its statutes and in the interest of public credit showed the State what were its views, answering point by point to all the ques tions which were set, but naturally without any result. Parallel to this a well determined plan was established which practically had as its objet, that the wasting of the occupied territories should be extended by the clauses of the Treaty to Moldavia and Bessarabia. One of these clauses especially, the delivery of corn was carried out with the greatest punctuality. There is no doubt that the hardships of the Roumanian population in the sad times through which it passed could not remain without an echo in the world of the Allies, giving them o glimpse of what they were to expect in the event of a German victory, and we can mention that this made them see what the enforcing of the clauses of that Treaty would have meant, if against all expectations the Central Powers had been triumphant. Luckily that the whole organization of trumpeting their succeses all over the world fell, their hopes of victory were finally lost in the autumn of 1918 and the Central Powers compleely exhausted had in their turn to bow down and demand peace. In November 1918, the Roumanian Government though being under the rule of an imposed peace had no intention to leave lassi and to resume the course of public life as long as the troops of occupation were still scattered over 01 tenia and Muntenia.JWith the same spirit in which she entered the war, Rou- mania declared the peace which had been imposed on her and which she had never scantioned, as nonexisting and taking up arms flew to chase the enemy from the occupied territories, so that the armistice of 1918 found us again under arms and by the side of the Allies, proving that in spite ot the Russian defection the soul and the discipline of the Roumanian soldier had not been shaken. The circumstances at that time enabled the Roumanian army to be ready 80 for cooperation with the Allies after the Armistice of November 1918, imposing on Roumania fresh military sacrifices. In fact the allied armies were advancing towards the Danube, Mac ken sen s armies had to procure their safety on that front by their own proper forces, by increasing the number of their troops in the occupied territories from six to ten divisions, and though their weakness was evident, still tried by dilterent manoeu vres to prevent the cooperation of the Roumanian armies with those of the Allies. Roumania though disarmed and lacking everything to maintain her arm> by cause of the enemy’s exactions, sent to General Mackensen on Hie 9th of Novembei an ultimatuminviting him to evacuate Muntenia, and on November the 10 the mobilization of the army was decreed, answering by this measure to the demand of the commander of the army of the Danube General Rerthelot. The Roumanians reentering into action provoked the beginning of the re treat of the German army from Roumania, retreat which would not have taken place if it had been only for the allied armed forces on the Danube. As a consequence of this action the commander of the German army under the semblance of taking measures for its safety, ordered all the destructions which the armies of occupation had not effected, and also that all the rolling stock of the railroads of Roumania should be carried to Transilvania iorming trains loaded with supplies and material which was carried towards Buda Pest. The operation ceases on November 1918 when the General armisfie of Spa Was concluded. SECTION III FINANCING OF THE WAR • August 1910. November 1918. The advances of five and seven millions £ even if they had not been com pletely spent until the retreat to Moldavia, were far from meeting the payments and the liabilities for orders. So Roumania completely cut off from her great Allies in the West needed, besides arms and ammunitions, to be sent according to the military convention of August 4 th 1916, means for financing the war. Later on when her territory was reduced to a third by the occupation ol the enemy her ressources were far from being adequate for sustaining the war. I. CREDITS GRANTED RY GREAT BRITAIN The issue policy ot the National Bank has always been founded on a me tallic security of at least t/z, and it is sure that the Goverment never thought for a moment of appealing to the services of the issue bank, and to oblige it at the most critical moments to issue notes without proper security. 81 6 Bat Roumania entering the war and her frontiers being closed, the possi bility of obtaining metallic currency, to serve as a security for the issue, did not exist, so the form was to be found, for the new issues of the bank on behalf of the state to have a proper security. So in March 1917, on the basis of the financial Convention concluded between the British and the Roumanian Government a credit of £ 40 millions was opened to Roumania, as had been promised by the allies, by instalments. (An : 17). This credit was to be used for financing the necessary expenses for covering the cost of material and ammunition, sent to us by the Roumanian military mission in the west, and on the other hand for financing the necessary expenses for maintaining the mobi lized troops. These could not be maintained otherwise than by advances granted by the National Bank, which ought to have a legal basis for its issue, that is a security. Therefore this security was already arranged by a part of the said loan. To this effect art. 9 of this convention says: -In view of the arrangement which the Roumanian Government might wish to make in order to procure in London, security for the issue of Roumanian notes, the British] Government undertakes to change stock not bearing interest, of the British Government, for an equivalent amount of Roumanian Treasury bills, issued in virtue of this convention, and by instalments as will be determined later. For the object of issueing notes, these bonds may not be discounted in cash. Later on the British Government by a communication made on May ll 1 * 1 1917 to M" r Mi$u, consented to open an account in the books of the Committee for reducing the National debt called The Roumanian Government (for the account of the National Bank of Roumania, and it. credited that account with the sum of £ 5.000.000 (Annex 18). In the letter which the Lords of the Treasury sent to the Minister of this country in London, they add that this credit, which was granted in exchange of Roumanian Treasury bills for an equivalent face value, created in conformity with the stipulations of the convention is subject to the condition that it should not bear interest, to serve only for the issue of National Bank of Roumania notes, that they should not be extinguished by drawing by lots, and that this agree ment shall continue to be in effect, till a year after the conclusion of the peace when the obligation on both sides will be annulled. On Sept: 4 th 1917 a new credit of £ 3.000.000 was granted, and on Dec : l 5t 1917, a further credit of £ 4.000.000, also under the same clauses as in the financial convention concluded in March 1917 (an : 18). But to this latter credit is added that the Lords of the Treasury have agreed that it is an ex ception, that it remains in effect for two years after the end of the war, but if circumstances should demand, they will be disposed to consider an application for extending the above delay. 82 On the strength of the above mentioned security, and of the drafts procu red by the Bank, till the armistice, the National Bank had advanced 1.600.000.000 lei (an : 24) with which we carried on the war in our country, as follows. On Oct. 21 st 1916 - . 300.000.000 lei » Apr. 12"' 1917 300.600.000 » » Dec. 20"' 1917 300.000.000 » » May. 16 th 1918 300.000.000 » Examining the form in which England granted the credit mentioned above, at first sight one might say, that when the delay for which the validity of these obligations was stipulated, came to an end, they were to be annuled. In fact this was a typical formula applied to all interallied debts. Now, as they were intended as a security for an issue, the possibility of their being annulled after the end of the war is out of the qufstion, leaving an effective issue with out any security, an issue which served to supplying the troops which were carrying on the war. This clause can only be interpreted to mean that, it could be annulled, if, it is well understood, the enemy being vanquished, would have reimbursed the value of all the advances made to the different allies, for financing the war, and only in this manner can the clause of^innulation, after a year from the end of the war, be interpreted. II THE ISSUE OF ENGLISH, FRENCH AND AMERICAN DRAFTS Besides this assistance given for the security of the National Bank issue of notes, insufficient by reason of the Russian defection, for supplying the needs of the army, and what is more of the population, impoverished by the Russian armies of 1.000.000 men, on Dec. 1 st 1919, the financial delegates of the United States of France and Great Britain, at the conference of the allies held in Paris, decided to advise their governments to grant immediately a temporary help, for continuing the war. This help consisted in a participation, in equal parts, of the United States, France and Great Britain, in a credit which was to be opened to the Roumanian Government in dollars, francs and pounds sterling, for a sum corresponding to 20 million dollars (An : 19). The credits were to be negociated, so as to place at the disposition of the Roumanian Government roubles which were to serve exclusively for purchases in Russia of supplies for maintaining the army and the population. This convention provides under art 7, that the provisional agreement which will last till January 31 st 1918 will form the object of a another subse quent agreement. This proves beyond doubt that th a Allies after the battles of Maresti and Maraserti notwithstanding the Russian defection fully appre dated the sacrifices that a handful of men, retired in a small corner of the country had made. At the same time on the information of their represen tatives, they had arrived at the conviction that even the population was without resouerces on a count of the great member of Russian troops which were becoming regular bands of robbery and destruction. In virtue of this arrangement the representatives of the United States of England and of France were authorized to hand to the Roumanian Government drafts in order to procure in Russia necessary supplies for the population and the army. These drafts were to be negotiated by the Interallied Commission in Russia and their produce was to cover the price of purchases made for supplying the country and the army: For this object were issued: By the French Government through Mr. de St. Aulaire French francs 8.500.000. By the English through Mr. Barclay £, 600.000. By the American Government through Mr. Wopika^ - 5.000.000. Out of these drafts only the French ones for 3.000.000 francs were nego tiated at the beginning and used for paying supplies, the rest of 5.500.000 French francs in drafts, by cause of the events in Russia there being no sufficient garantecs for depositing supplies or buying goods for immediate use, served with the consent of the representatives of the Allies as metallic stock for the issue which the National Bank consented to make for the government which paid the supplies for the army and the country from Bessarabia. During all this period the Allied governments were hoping that the Russian front would be reformed by the action in Ukraina, no longer asked Roumania to go on resis ting but still helped her for getting supplies from Bessarabia which was practi cally separated from the anarchy of Russia by the Moldavian National movement. If was only under the Marghiloman government that some of the Allies made reserves on the use of these drafts on account of the political situation and of the attitu le which that government adopted under the pressure of general Mackensen. These drafts are binding in the same way as the other English advances and are included within the frame of the Interallied debts. As we shall see lower down the English and American drafts have been withdraws (anex 20) or annulled and the issue of the National Bank based on these drafts remained completly uncovered. Therefore in this period of the war the financial operations which influenced our present financial situation are the following : 1. The guarantee of the issue for internal needs by England. 2. Special drafts which were used either directly or for issue made in view of supplies in Russia or in Bessarabia. 3. The regular war contribution levied by anticipation by the enemy who issued in the occupiel territory Banca Generala notes and confiscated the sums deposited by the National Bank at the Reichs Bank. 4. The consequences of the application of the Treaty ot Bnearest which likewise in the shape of supplies of cereals horses etc., a regular fresh war contribution. 84 5. The indirect financial effects which the British Corn Contract had af terwards, by the fact that all was destroyed, or taken by the enemy, or sold to the Roumanian army. CHAPTER III THE PERIOD OF THE GENERA!. ARMISTICE SECTION 1 THE CONTINUATION OF THE WAR NOVEMBER THE 15"' 1918. MARCH 31 ST. But when the Armistice was concluded whilst the Allied Countries demo bilized their troops sending them all to a more productive activity, the situation in Roumania and in the countries around her was not yet cleared up and new military operations had to be undertaken by the Roumanian army and the Allies at the beginning. The object of this action after the armistice had seen concluded was, 1) To force Mackenen’s army to leave Roumania and the Transylvanian territory. .... «. .. 2) To force Hungary to execute the clauses of the armistice ot villa uiusti and the convention of Belgrade. 3) To assure in the Centre and the East of Europe peace threatened b\ bolcevized Hungary and sovietic Russia. 4) To assure the enforcement of the decisions of the Peace Conierence as well as the compliance to the provisions of the treaties of peace by the vanquish ed countries Hungary and Bulgaria. . Seeing the delav of Mackensen’s army in evacuating Roumania and the infringements of the conditions of the armistice the Roumanian Government applied to the superior commanders of the allies to force Makensen s arm\ to cease its exactions and to evacuate the Roumanian teritory, especially as Marshal Mackensen refused to recogniz both the armistice of the villa Giusti and Hie Convention of Belgrade. On the refusal of Marshal Foch to extend the armistice signed by the Allied Powers, the Entente, and Hungary, the delay for the German troops in Hungary to evacuate ended an 19 th Nov: 1918.15 o’clock. But in spite of the harsh note handed to General Mackensen by Marshal Foch, in spite of all the fines which at that time represented considerable sums, the German troops as was ascertained by Franco- Roumanian Commissions constituted and placed at the frontier points, carried away nearly all the rolling stock of the railways that was left 260 engines (5.000 carrgages) amogst which were 60 carrigages loaded with agricul tural machines passed the frontier the large part, of the carriages, teams and cattle requisitioned by force on the retreat from the occupied Roumanian territory under the pretext that they were bought, these troops committed acts ■f sœ* 85 of vandalism laying waste and sacking the houses and property of the in habitants. All the former facts were stated in writing signed by tin French officers and some times by the German officers, while Mackensen’s army just as it delayed in the old Kingdom which it only left on Nov B"' delayed also in Transylvania without defence. So the whole Roumanian army had to continue the pursuit of Mackensen’s army. By chasing the enemy the war was not ended for Roumania and the clowd of an anarchical action led on two points by common agreement begins both West and East. After the armistice the revolution having burst out in Prague, Vienna and Ruda-Pest, the republic is proclaimed. This revolution more especially in Hungary had a bolchevic ch iracter, the propaganda being carried on by the former Un- garian prisoners returned from Russia. The Head of the Hungarian government himself, Count Karoly as the Hungarian authors own, had established himself on a basis of bolchevism and hoped that by a mild bolchevism he would be able to escape more easily from executing the conditions of the armistice. In this situation in the interest of public and private order the Rouma nians of Transylvania under the leadership of the National Committee orga nized national counsels and national guards, officially recognized by the Hun garian war office (order given in Buda-Pest on the 12 th 1918). This ho wever could not assure the life and the property of the Roumanian population, as they were continually attacked by the Hungarian national guards united with bands of robbing soldiers. On the intervention of the chiefs of the Roumanian population in Tran sylvania and Bucovina, the Roumanian Government with the agreement of the Allies decides to give its army orders to go into Transylvania to occupy the territory which the Hungarians should have evacuated, and at the same time to establish order. The Hungarians continued the terror against the Roumanian population evacuating public property in that zone endeavouring in o clandestine manner to provoke communism amongst the population and attacking in o systematic way the Roumanian soldiers with regular troops and organized bands. Then the Peace Conference of Paris in a sitting on Feb. the 2d th 1919, discussing the question of she trace of the frontier between Hungary and Roumania, mo difies the first article of tlie convention of Belgrade and decides that the Rou manian troops should advance as far as the line formed by the high road from Arad to Solonta-Mare by the railway Solonta-Mare to Oradia-Mare, Careii- Mareand Satu-Mare while the Hungarian troops were to retire to a line starting from the Tisza and passing about 5 km. north-west of Debretzyn and ar riving at Seghedin. Between these two lines a neutral zone was created which until the final establishment of the frontier was to be occupied by French troops under the command of general Berthelot. The Karoly Government however answered that it 'v-; /. ’ - 86 was not in a position to take cognizance of the decision of the Peace Conference and flatly refused to execute the decisions of the Supreme Counsel and passes the power into the hands of Bela Kuhn’s communists, with the intention of letting loose a general bolchevik revolution in the centre of Europe, which joining hands with the Russian soviets was to turn over the order of the State in the East of Europe, and after that with the help of Germany to spread the cataclysmeall over the West. In front of such a situation created in Hungary, the Supreme Counsel in the wish of reestablishing as soon as possible peace in Central Europe, sends General Smuts to Buda-Pest who proposes an agreement to the Hungarian Government on April the 4 th 1919. The Hungarian Government sees in general Smuts mission, a sign of weakness on the part of the Entente and proposes inacceptable terms while the Allies seeing the insuccess of the mission, maintain on the one part the blockade against Hungary, and on the other decide to undertake a common military action, considering it oven necessary to conclude a convention with Roumania in April 1919 for: 1) To assure the execution of the military convention of Belgrade of Nov. the 13 th 1918, and of the decision of the Superior Council of war dated Feb. 26" 1919, concerning the neutral zone betiueen Hungary and Roumania. b) In futur to execute the decisions of the Peace Conference in reference to the decisions conditions and armistices mentioned above. 2) To oppose the defensive barrier against bolchevism jointly with the Tcheco Slovak and Polish Allied armies. The Roumanian armies whose general mobilization was yxearly complete will act with the Allied armies in the East for the above objets. The Hungarians who were in permanent communications with the Russian soviets continued their provocations which in the month of July became more and more violent and when numerous attacks took place along the Tisza. At the same time as their military preparation, the Hungarians fomented plots, and began an intense propaganda in the whole of Central Europe and es - pecially in Roumania were they hoped at the same time as the offensive ot the Tisza to provoke a revolution. On this account the Supreme Counsel on July the 10 th 1919, invites the president of the Roumanian delegation at the Peace Conference, to come and confer with him on Friday July the 11 th 1919, on the eventuallity of mili tary measures to be taken against Hungary, ai d on Ju'y the 11 th the Council meets under the presidency of Mr Clemenceau at which also Marshal Foch at tended. (Annex 23). At this Conference the delegates of the other succeeding States refused to give their military assistance for several reasons, and only Roumania did not bargain and offered to give several divisions which made Mr Clemenceau say: * Roumania offers her divisions and asks nothing in eschange*. The Hungarians however who knew what the Allies were preparing, 87 decided to attack Roumania be’fore the common attack of the Allies should take place, so on July the 20 ll ‘ the Hungarian army passes the Tisza and attacks the Roumanian army. The Roumanian army taking a counter offensive beats the Hungarian red army to the satisfaction of the whole healthy public opinion of Hungary, drives them back across the Tisza advances towards Ruda-Pest occu pying it on August the 4 th . The occupation of Ruda-Pest and of the territory West of the Tisza had as its object to disarm the communist army reestablishing order and quiet in Hun gary and obliging her to execute the decisions of the Peace Conference. Roumania’s exceptional military action did not end even when all the Treaties of Peace were concluded, as she was obliged to remain in a permanent state of armed expectancy assisted also by the presence of the troops of the great Allied States. (England, France, Italy). Roumania instituted in this situation the following military zone under martial law. 1. At the Dniestre so as to meet eventual attacks executed by surprise un der diffrent aspects by sovietic Russia. 2. At the South Frontier of the Quadrilatere for assuring order and qniet amongst the population against the bands of Rulgarian comitagis. 3. At the Western Frontier against armed incursions and infiltrations of spies kept up by Hungarian chauvinism, all this after she had cooperated with the Allied army of the East for pacifying sovietie Russia, with Poland, Galicia, and the Allies in Dobroudja. In fact the Interallied command was in Bucarest till August 1920. SECTION II. Financing the period after the Armistice The army worn out and decimated after the severe struggles which it had gone through during the offensive of 1917. The country exhausted on one side by the Russians and totally laid waste, fust by the German occupation and then by the retreat of Mackensen’s troops, the population robbed and lacking even the means of existence, made a supernatural effort which only an unshaken faith in the final triumph gives to nations which are eager to cut out their future existence. The financing of this period and the continuation of the war was done: 1) By issue of the National Bank without any real security other than Trea sury Bonds of the Roumanian State. 2) By internal loans. 3) By advances granted by the Allies in the shape of armamant, war ma terial and supplies for the civil population. 4) By issue of Treasury bonds abroad, for the supply of the Country. 5) By advances granted by the International Committee of Relief bonds. 88 1. Issue of the National Bank The Roumanian Issue Institution granted the State on Treasury bonds the following loans. On May the 12 ,h 1919 1.500.000.000 lei Oct. 16 th 1919 1.000.000.000 June the 11 th 1920 5.000.000.000 » January the 5"‘ 1920 . 2.500.000.000 » July 30 th 1921 2.000.000.00 » To this we must add On June 24 11 ' 1920. For seeds . . On July the 30 th 192-1 for cereals On July the 30 lh 1921 for cereals 2.000.000.00 » 2.000.000.00 » 2.000.000.00 » Total 10.8.000.000.00 lei Out of these 10.800.000.00, 7.025.991.421 Lei were used for the unilica- tion of our currency (changing kronen, roubles Banca Generala Notes) as follows : Kronen 8.718.587.304 = Lei 435371380885. 1.888.267.705 640.096.501 Banca Gen.: notts 1.463.546.366. Total . . . 7.025.991.421. Therefore on the needs^otjthe army were spenlt 37 74 millions. Roubles " 1,208.731.216,58 11 Internal loans. On January the 15 th , 1919, the Roumanian State contracted a consolida ted loan on the internal Markt t (Imprumutul Uniri) with 5 0 / 0 interests issued at 90 °/ 0 . Ext'nguishable in 40 years, of 11438006, and in Feb. 1920 a further loan (Imprumutul Refacerii) with 5°/ 0 interests at a price of 8°/ 0 Ext'nguishable in 40 years of 2.730.911.000 Lei. Besides these loans the Roumaniann State borrowed by issuing internal trea sury bonds a sum of 6.845.000,000 which served tor the needs of the Country impoverished by the armies of occupation of the enemy. III. advances granted by the allies. The fact that only the Roumanian army still represented a well organized force, well trained for fight appreciated by the Allied Governments, so that after a Conference held on March 26 th and 28"', 1919, the contributive part of France, England the United States and Italy for the material help to be granted to Roumania so as to lead to a satisfactory conclusion the very hard task which she had undertaken in tlie middle of anarchy which was threatinngto invade the whole of Central Europe, was determined. Thus each of the Allied countries contributed in sending either war ma terial or ass'stance for suppying the population in order that Roumania might be able to put an end to this last phase of a general war, which had remained at her charge (anex 23). Examining in this chapter the assistance that was given to us, the character of Interallied loans is clearly to be given to these advances (An : 76). Being given the special geographical situation of Roumania completely surrounded by enenies, the supplies made by the Roumanian State during this period had a character of Interallied debts, as Roumania could not receive du ring the hostilities, provisions for her civil population as other States did under the occupation, to that the supplies du’ ing these periods, are nothing else than supplies carried on from the period of hostilities, an 1 which had become all the more imperious as the territory occupied by the enemy’s troops had remained after the retreat of the same quite destitute. Roumania received then from the Unite! States goverment for materials and supplies for the civil population, sums amounting to 3.612.849.494 S' see below the general account of debts. This situation which was already bad enough w«?s aggravated by a deci sion taken by some of the Allies of asking for the restitution ot some ot the means which had been given in Moldavia and which served as security for the issues for war requirements. IV Issue of external treasury bonds At the same time as this situation which practically represents for the grea ter part, the covering of war Expenses Roumania was obliged for the supply ot the population to appeal to the confidence of private commerce and to a-suie the payment for these supplies by treasury bonds expressed indifferent cunen- cies, amounting to one milliard four hundred million lei gold. These treasury Bonds were consolidated in 1922 by a loan of 30 million pounds sterling, converted at dil ferent rates according to the cmrency in which the bonds were issued and redeemable in 40 years. V. Advances made by the International Committee of Relief Bonds In April 1920, under the presidence of Sir John Bradburry an internatio nal conference met in Paris for helping the states which had suffered b\ the war. 90 In this conference took part: Argentina, Belgium, Canada, Danemark The United States, France, Great Britain, Holland, Norway, Sweeden and Switzerland, and a total amount of credits which each state present could grant in 1920, the nature of the goods they could deliver and the guarantees to be demanded were dis cussed. The general lines of the programme to be realized and the mo de of entrusting its realization to a permanent international Committee composed by delegates of the States participating at this conference were agreed upon. This international Committee is called »Comission International du Relevement du Credit Economique“. The work of this committee isa humanita rian assistance as, as long as war credits exis'ed the aids received by the States were debited to their account. After that assistance was given for Treasury Bonds and this Committee had in view amongst other tilings the special bonds which we were to give for the new bonds creating a special bond called ”1920 Relief Bonds--. What is more, the other countries for which the State of war was at an end after the armistice, wished to consolidate the advances received from the armistice to 1920 against the said new 1920 Relief Bonds--. In this Comm dee of Assistance the United States declined to take park urging the impossibility of granting loans outside the law * Liberty Act*. This is how we may explain that Roumania did not give America any 1920 Relief Bonds because considering that these advances had been granted for a State of war, confirmed by the fact of America’s having participated in the confe rence which had decided these advances, they had been granted in conformity with her laws and therefore could not be taken out of the State Treasury without a vote of congress so that the debt towards the United States maintains its characteristic Statute as it was sanctioned. Consequently Roumania for assistance purposes received the following sums, of which a great part was spent for helping and bringing home the prisoner s. From England £ 2.195.822. —5.—10 From Australia £ 1.118.754.—11.—7 From France fr. 445.804,98 From Danemark danish cr. 132.387 From Norway Norv. cr. 48.013, and £. 237.713 From Sweeden Sw. cr. 8.757.997 From Switzerland Sw. fr. 14.251285 These relief bonds therefore have nothing to do with the debt which repre- ents the countervalue of the assistance given by Americafrom 1918 to 1920 which was a war debt as we showed higher up, and the Relief Bonds to Ame rica have remaind what they were at the moment when the debt was contracted namely a debt under the liberty act, and a debt under the convention of July 9 th , 1918, for selling the surplus of war materiel, that is, the same kind of debt as 91 * that of France, Italy, Belgium, and not a relief debt with a well determined objet of assistance. In fact not a single official schedule puts Roumania down as a debitor of reliefs. This explanation once given in 1925 when the debt represented by. 1920 Belief Bonds came to maturity, the international Commitee created in virtue of the Conference of Paris in April 1919 invited the states who had received this assistance to meet in ordre to discuss the consolidation of this debt which had nothing in common with the war debt. Before the conference began, Roumania thought that the question of settling these Relief Bonds, though they have no spe- ciel character might be for some States a means of demanding an anticipatedset- Icment of war debts. In our communication to our Minister in London we again expressed our wish that it would be well for this matter to be settled in connection with the war debts, as otherwise a difficult situation would be created for us in front of the United States an 1 the other creditor states if they demanded from us an anticipated payment. Consequently on December 19 th 1924 in London where the International Relief Bonds Committee met, on the observation of the President of this Com mittee that all the states having Relief Bonds are represented in the Committee and that these debts must be treated otherwise than war debts, M‘ N. Titu- lesco the Roumania Delegate answered with the following declaration which shows that Roumania never had the intention of favouring some of her creditors to the detriment of others. "Roumania desires to pay her debts to all "her creditors. In fortunately the consequences of the war have been nearly as ^severe as the war itself. While the manifold obligations for restoring Rouma- „nia as well as the depreciation of her currency do not allow of our paying our "debts in the way we would wish, Roumania considers that all the charges in «respect of the war must form the object of a general settlement so that Rou- "mania may not be placed in the position of granting to one creditor a regime "which it could not grant to another so that her loyalty as a debitor should »not be discussed. But I was told that my arguments, though well founded, »cannot be applied to the special relief bonds which form the object of the "work of the honourable committee before which I am speeking. I was told that the Relief Bonds issued in virtue of the decision of this ho nourable committee have an international character which distinguishes them "from the debts of Roumania towards the different States with individual "title and that the pavement of these bonds before the l sl of January, "1925 is beyond discussion. In front of this point of view firmly uttered and "the maturity of the bonds which is imminent, in front of the text of these "bonds, which says that the claims they represent are a first lien on the pay- "mens of reparations Roumania, cannot do anything else than submit--. In the discussions which took place in the commithee if was denied that this debt had the character of a war debt, arguing amongst other things that it cannot be a question of a war debt for Denmark, Switzerland and Sweden. After the discussions the reserves made by our delegate were accepted, that when the war debts will be examined Roumania shall have the right of discussing the norms for liquidating war debts so that they may be applied also to relief bonds. On another hand it was admitted in a final manner that arrangements in respect of relief bonds shall not constitute a precedent for war debts. Our insists nee before the meeting of the international Committee tor relief bonds at the London conference in December 1924; the settlement of this question was put off at the same time as the question of the interallied debts was, justified and founded on the note which America sent us ulteriorly In fact immediately this matter formed the object of an arrangement being a debt of international assistance, inasmuch as also the neutral States had taken part, the Americain goverment notified to us that as we had begun to pay our debts to other States, it did not see why we delay our debts for relief bonds having already begun to extinguish another relief bond debt which the American Govt rnment had considered as a war debt. In the first place the debt in relief bonds is small, whereas our inter allied debt amounts to a much larger sum not only towards America but even to En gland and France as we said above. We answered them that the Roumanian Government not only had no hostile intention but on the contrary as it had profited by the assistance of the United States before and after the svar, it would have been madness on our part to displease by our attitude a friendly State and not to consider the assistance which the great Republic could offer for restoring and consolidating great Roumania. In truth Roumania isolated, laid waste by the hostile occupation abando ned by its greatest and nearest ally obliged to organize in the midst of all these difficulties nearly a new State to unify four existing regimes all so diffrent one from another could only just with great sacrifices balance her budget, stop the monetary inflation and bring production almost to a normal state and pul nor finances on a solid basis. All, these efforts of ours were made exactly by us in order to assure the claims of our Allies rather than give them verbal or even written assurances Roumania in fact has always declared that she is far from denying her debt to the United States, and in order to prove this she sent a mission in 1922 which was to determine the amount. These war debts have a character created by the circumstances in which Roumania found herself when they were granted to her and not only till the general Armistice but even after, on account ot the circumstances. Conclusion The interallied debts a rose, as we said above, from credits and war mate rial granted between the Allied States during the war and in view of carrying it on to common victory. The way the war was led represents the cooperation and the solidari- 93 zation of all the forces by putting together the ressources in men, capital, and credits, and the intervention of the States took place without weighing the financial difficulties which were to be met in carrying on the hostilities. The granting of loans to the Allies during the war does not mean granting a contribution to the State which borrows, but for the common cause of the Allies, the common war. That is why from a strictly juridical point of view the nature of the claim for interallied debts is that of a contractual obligation, and from the point ot view of equity the nature of the claim is quite special. Besides these general arguments which I pointed out briefly the problem of Roumania’s interallied debts appears as we have shown higher up under a particular aspect, specific to the conditions of her war. In fact the Allied States who took part in the world’s war can be groupesd in two classes: those who besides their contribution in men and money had a signs ng front on their territory, and those who were spared from'knowing the destructions and disasters of war on their own territory. Roumania must be classed amongst the first ot the States who had to suffer the consequences of war on their national territory, Bucovina was three times the theatre of operations, the sad exodus of the retreat, the occupation by the enemy of two thirds of her territory and the systematic speculation by the enemy’s troops with prievious experience. Likewise the States which participated with a fighting front on their na tional territory can also be classed in two categories according as they had to wage the war on their western or eastern front; the western front which was a front of Ira rd and continual fighting was defended by all the great Allies to gether. The Easteru front further away, much more extended and less tried had a special situation by the presence of the Russian Empire which represented one of the principal factors to lean upon, and whose forces had no need of the help of the other Allies and could on the contrary aford its own. Roumania by her geographical situation comes under the Easteru Front, which from the Baltic to the Black Sea, was entirely left to the operations of the Russian State and the Roumanian State. The solidarity between the Easteru and the western Front should have brought on the victory of the Allies and the presence of the different Allied missions besides the general head quarters of the fighting armies had as an object the coordination of the mutual operations. Roumania made the maximum effort to put in fighting order all her resour ces in men, on a front of 2.150 km which it had to defend; a front which constituated a geographical inferiority and which could not be held without the help of the Russian armies. The events ulterior to the declaration of war showed the way in which this participation was carried on and how it ended with the Russian defection. Roumania found herself then in the difficult and unheard of situation of a belligerant whose ally not only abandons him but even turns against him. Roumania who had felt from the beginning the hardships ol her war when the help of her western Allies in arms and amunition arrived 94 with great delay through Russia, when the Russian help itself arrived unsuf ficient and delayed on this Roumanian front of 2.150 km. Roumania throngh the Russian defection found herself completely isolated from her Allies and completely encircled by enemies. And in the spring of 1919 when the belligerants were going towards the signing of the peace, Roumania had to take up the role of establishing order in Hungary which was threatened by the revolution other troops; the war which the Roumanian State was obliged to wage on this occasion was nothing else but the prolongation of the great war, whose operations had taken place in the near east. Roumania therefore continued the period of hostilitis in order to defend the peace which was threatened. The problem of the inter-allied debts and of the reparations are the two views of the same question which draws its origin in she world’s war. Evidently that the interallied debts have a contractual character between the allies; the reparations with a contractual character between the allies and the for mer enemies but the coanexity between the set tling of the allied debts and the recovery of the reparations is evidenced by the fact that the debts represent a part of the expenses incurred for a mutual aim, whertas the reparations represent the liquidation of this mutual undertaking. To proceed first by settling the expenses without liquidating the mutual undertaking would be to pay no attention to the efforts which had been made and to impose on the allied states the charges which ought to fall on the for mer enemies. The principle which ruled the grant of reparations for compensating the damages suffered by property and by persms was adopted in order to relieve the situation of the States which had suffered by the deed of the aggressor. To place the settling of the interallied debts ontside the scope of the reparation problem would be against the very principle which was adopted, the situation of the vic torious allied states becoming probably worse than that of the vanquished. If our former enemies have to bear the charge of paying she reparations their charge can be more easily carried out than by the allies whose productive power was destroyed and who had to suffer through the ravages of war ou their own territory. In the last analysis the situation of the States which participated in the world’s war is that of debitors towards some of the allies and of creditors as to the former enemies. The enforcing of the claims which arise out of this situa tion can only be effected in an indivisible manner as they have their source in the same mutual undertaking: the war. The enforcing of the interallied obligations without coordinating them with the rights over the former enemies would turn the conqueror of the war into the conquered of the peace. To be able to follow up clearly the financing of Roumania’s war and her interallied debts we publish herein a general account of the aproximative ex penses of the Roumanian State for sustaining the war. PROVISIONAL SUMMARY OF THE FINANCING OF THE WAR ') THE CHARGES IN THE PERIOD OF THE MILITARY PREPARATION (Armed neutrality) (from the 4 th August 1914 till the 15/28 August 1916) I. THE AID GIVEN BY THE ALLIES A) France Transfers of war materials 15.235 tons or roughly 110.600.000 frs £ 4.361.610.00.00 8 ) NOT A. — Till the 28th August 1916, the Roumanian Government paid in cash to France 23.707.000 frs. from the credits put at its disposial by the English Government. This sum has been deducted from the general account of the war debt. It does not therefore enter in the sum of 110.000.000, which mak is the object of these cessions. B) England Cash from the credit of £ 5.000.000 £ 4.100.436.10.09 NOTA 1. — The expenses have been made as it is shown, for covering the general needs of the country and for the needs of the army. 1. For the Army L. st. 3.027.769.—9.—8 2. » » Finance Ministry » 440.658.11.—2 3. -- -> Domain -- » 118.838.15.—10 4) I or medicines £ 128.501.13.—2 5) » State’s Monopoly » 3.769.17.—6 6) » payment of the interests to the British Treasury for the diminished treasury-bills » 379.897.—5.—4 7) For the payments of the stamps to the British Treasury for the changed bills of Treasury » 6.000.—.— 8) Various » —.14 —4 £ 4.100.436.10.-4 The payments have not only been made in Enghnd, but also in other countries especially in I ranee, as shown lower down : 1. In England £ 853.287.-7.-6 2. » France » 2.275 691.—3.—^ 3. " Switzerland » 179.160.—4.—4 4. » Russia » 752.584.—0.—0 E. » America » 35.711.—0. —6 6. » lapan » 4.002. 15.—4 4.100.436. 10.—9 NOTA 2. — From these 4.100.436.10.—9 have been paid till the 28 lh August 1916, £ 379.897.-5.-1. C) Italy Cash Italian lire 10.012.500 (at the Banca dTtalia) through the intermediary of the Banca Najionala). Not a. — This sum was spent for the needs of the army and was paid from the disponibilities of the Roumanian Treasury. The total of the allied aid . . . £ 8.462.046.10.09 ') Under reserve of the verification of the accounts of the allies *) The conversion was made at legal parity to enable comparing figures. 96 11. EXPENSES MADE OUT OF THE RESOURCES OF THE ROUMANIAN STATE A) In the country In cash pre-war lei ... . 710.310.051,97 or £ 28.104.503.17. 7 KOTA. — I his was spent as Mows : a) From the end of Inly 1911 to the 1 1 «> March 11115 (Fund b) From the 1R» March 1915 to the 31 March 191(1 c) From the 31 March 1915 lo the 31 March 1916 d) From the 1st April 1916 to the 16"- August 1916 Total . . . Lei 129.870.W27 „ 3.591.865,— » 359.997.805,21 . 216.842.961,49 LeT7lb.310.051,97 These credits hive been taken from 4 loans horn the Banca Nafionala of lei 400.000.000 and reimbur sed to the Bank by the »Imprumutul National* from April 1916. The rest to lei 710.310.051, bani 97, was taken from the disponibilities of the Treasury from 1914, 1915 and 1916. B) Tn foreign countries Payments in casli from the Resources of the Roumanian State for the army. French francs 23.067.259 or ■£ Pounds sterling ' ” The value of the loan ot 10.012.500 Italian lire made at the Banca dTtalia, as abovespent in the period of the neutrality and paid out ot the rcsomces of the Roumanian Treasury Total . . • Æ 914.639.17.— 9 107.000.—. — 397.005.12. — _9 29.583.149. 8.— 1 The general total The allied aid . . - ^ From the resources of the country ” The total of the expenses in the period of mili tary preparation ^ 8.462.046.14.— 9 29.583.149. 8.-1 38.045.195.18.—10 THE CHARGES IN THE PERIOD OF THE WAR FROM 15/28 AUGUST 1916 TILL THE GENERAL ARMISTICE, THE 11 th NOVEMBER 1918 >) 1 THE AID GIVEN BY THE ALLIED A) France (from the war accounts established by common agreement with the french government) 1. Material given in conformity with the contracts from 1915 and 1916 and in conformity with the military convention from 4"' August 1916 Frcs. 888.667.117.10 Transfers in Siberia made to the Roumanian Transilvanian legion organi zed by the General damn. » 18.459.521.54 Frcs. 907.126.638.64 is deducted the mate rial sent in the period of the military preparation, 15.235 tons valueing of . . Frcs. 110.000.000,— Rest Frcs. 797.126.638,64 is deducted the credit ac count of Roumania (the value of the material from Archan gel taken from the French) . » 13.850.376,27 Frcs. 783.276.262,37 To be added the value of the transfers 783.276.262,37 french francs or £ 2. Bills of exchange (St. Aulaire) frcs 8.500.000,S remitted to the Finance Ministry in December 1917 and January 1918 £ 3. Credits in cash frcs. 27.652.836 ” Nota.—These credits in cash in French francs 27.6ri2X16, were ac corded to the Roumanian State during the war for the following needs: Frcs. 3.500.000 aid to the Roumanian prisoners (Oeuvre du vfitement des prisoniers de guerre, Section Roumaine). » 1 1.400.000 payment for coupons (the coupons of the Roumanian rent in France, paid by the Comptoir National d’Escompte et Banque de Baris et des Pays-Bis. These payments have been made from the I9 lh lune 1917 to the 6 th August 1920). » 12.600.000 aid to the Roumanian refugees in foreign Countries. Payments made in 1917 and 1918. » 92.836 aid given in Stockholm for the Legation from Petro- grad and the Roumanian refugees from Russia. Frcs. 27.652.836. Total ... £ 32.491.183. 3. 7 i) Under the reserve of the verifications of the allied acconnts. 31.057.687. 1. 7 337.033.10.— 1.096,462.12.— . . though this debt was contracted and is payable in the present cdrrency of the creditor coun- Ines tins transformation into the strongest currency such as the pound sterling at legal parity, was effected only for the purpose of being able to make a globa estimate. ,< v . -'v 7. v 98 B) England After the official English account of November 1921, were accorded to the Roumanian State from the beginning of the war (1914) till the general armistice the following sums in material and advances in cash: Services made by dif- Roumanian obligations de year ferent English departe- advances in cash L. st. Total Debit tained by the English Trea- ments (materials) sury for the debt 1915/16 7.059.928.18.0 7.059.928.18.0 7.250.000 1916/17 4.514.164. 7.8 4.514.164. 7.8 5.250.000 1917/18 1.304-636.18. 0 559.693.18.5 1.864.330.16.5 2.600.000 1918/19 48.381.19.11 64.804. 2.1 113.186. 2.0 Total till the 11 th Nov. 1918 1.353.018.17.11 12.198.591.6.2 13.551 610. 4 1. 15.100.000 iVofa. We must deduct from this account the sum of 4.100.436.10.9. Pounds sterling, accorded in the proceeding period, so that the English account i > the period August 1916—November 1918 amounts to the sol lowing sums. 1) Material £ 1.353.018.17.11 2) Credits in cash . „ 8.098.154.15. 5 Total - ^ 9.451.173.13. 4 Nota i. From the advance in cash of L.st. 8.098.151.15.5, the Rouma nian Legation in London pi id to the »War-office. .Ministry of Munition., Ministry of Food., and to the .-Admirality- the sum of L.st. 1.353.195.15.8 which covers entirely the sum .Services made to the various English Depart ments materiels". Note 2.—Likewise out of the advance of 8.008.154.15.5 The Rouma nian Legation in London paid interest to the amount of L. st. 1.941.225.1-.1 Until the verification of the British discount the Roumanian Government ma kes special reserves about the payment of L.st. 1.353.195.15.8, for material paid and L. st. 1.941.225.12.1 (interest paid). 3. Drafts Barklay £ 600.000 remitted to the Minister of Finance in Iasi These drafts were not paid by the British Treasury 4. Credits not bearing interest amounting to £ 12.000.000 for security of the National Bank issue. Thee credits were granted in virtue of the convention of March 31 1917 (art. 9) in stock of the British Gove rnment not bearing interest remitted to the Bank of England for an equivalent sum of Roumanian Treasury bonds Total England . . . £ 600.000.00. 0 " 12.000.000.00.00 £ 22.051.173.13. 4 ') The sum of L. st. 12.198.591.6.2 represents the total of the 2 loans of 5 and 7 million L. st. granted to the Roumanian State in 1915, while what is over 12 million L. st., represents a fraction of the loan of L. st. 40 million granted in March 1917 and annulled. ** 99 C) Italy Materials in value of 972.785 Italian lire 3) Mountain batteries of 65 m/m) £ D) America Bills of exchange (Wopika) in va'ue of dollars 5.500.000 remitted to the finance Ministry in lassi and withdrawn ulteriorly 38.571.18.00 1.129.656.19.09 THE TOTAL AID OF THE ALLIED a) France £ 32.491.183.03.07 b) England . . . » 22.051.173.13.04 c) Italy 38.571.18.00 d) America 1.129.656.19.09 £ 55.710.585.14.08 Is deduced: 1. The value of the bills »Bar- klay* un paid till to-day by the English Treasury £ 600.000.00.00 2. The credit of 12.000.000 in English obligations deposited to day at the Bank of England . » 12.000.000.00.00 3. American bills of Exchange Wopika, withdrawn 5.500.000 dollars ' . . 1.129.656.19.09 £ 13.729.656.19.06 Rest . . . £ 41.980.928.14.11 II) EXPENSES MADE FROM THE RESOURCES OF THE ROUMANIAN STATE In the country a) Cash for the needs of the army lei gold 1.890.840.838.22 or £ Nota. — I his sum of 1.890.840.388.22 proceeds from the 4 louans for the war each of 300 milfmns accorded by the Banca Nationals during the war. These loans have been issurd being covered by the credit of 12.000.000 Pound sterling accorded by Great Britain and by I he French drafts (Saint Aulaire 5 500.000 frs.) English drafts (Barclay 600 000 L. sterling) Ame rican drafis (Wopika 5.500.000 dollars) which have been abready mentioned The rest up to the sum of 1.890.840.380.22 has been covered by the disponibilities and the Treasury bills of the national defence. b) Requisitions. Requisitions of the Roumanian State for the needs of the war from August 1914 till March 1919 are about 1 milliard lei, which at the exchange of 400 lei = l sterling £ Report . . . £ 74.973.730.01.06 2.500.000.00. 00 77.473.730.01. 06 I ;\-V V "x. 100 Report . . . In foreign Countries The payment in cash from the resources of the Roumanian State for the needs of the army : French francs 9.426.016.75 or .£ 373.750.19. 01 Roubles 8.312.825.— » » 8/6./67.09. 01 Lei 326.308.46 » » 12.938.09. 02 £ 77,473.730,01. 06 1.263.456.18. 00 The total of the expenses made from the resources of the country 78.737.180.19. 06 Recapitulation of expenses made during the war a) Allied aid £ 41.980.928.14. 11 b) Expenses from the resources of the country . . » 78.737.186.19.06 Total . . . £ 1*0.718.115.14. 05 THE LIABILITIES FROM THE GENERAL ARMISTICE TILL THE DEMOBILIZATION OF THE ROUMANIAN ARMY (11 111 NOVEMBER 1918—31 MARCH 1921) THE CONTINUATION OF THE WAR I. AID GIVEN BY THE ALLIED POWERS A) France 1. Transfers of materials after the decision ot Versailles of March 1919 Frcs. 112.796.392,22 2. Transfers ot fit ting-out, aliments, ma intenance in hospitals, expenses for repatria tion, etc., made with the Roumanian prisoners in Germany . . Frs. 12.384.552,84 125.180.945,06 Is deducted the credit account of Rou- mania for transfers of materialy made in Roumania to the Berthelot army. Frcs. Report . . . Frcs. 110.908.718,71 14.272,226,35 >) Under the reserve of the verification of the allies accounts. Xote. - Although this debt was contracted and is payable in the present currency of the creditor coun tries, this transformation into the strongest currency such as the pound sterling at ega paritv, was e ec ei onlv for the purpose of being able to make a globa estimate. 101 Report . . . 110.908.718,71 3. Credits: a] Advances made to the Roumanian Legation Paris at the occasion of the Peace conference Pres. 10.000.000,— b) Aid given to the Nansen mission for repatriation of the Roumanian prison- ners in Russia ........ Pres. 445.804,—- NOTA. — This debt of fres 415.804 has been paid by the agreement of December 1924 of the Conference of Itches bonds of London. Total fres. . . 121.354.522,71 .£ 4.811.828. 3. 7 ' B) England After the official English account of November 1921, were granted to the Roumanian State since the beginning of the armistice (1918) and till the end of the year 1921, the following sums in materials and advances in cash: year Services made by Advances in cash different English Departments (materials) Total Debt lioumanian bonds detained by the English Treasury for the debt. 1918/19 — 1919/20 2 967.047.03.08 1920/21 4.533.08.01 1921/22 Totil . . . 2.971.580.11.09 18.335.12.05 524 370.14.06 11.713.14.00 554.420.00.11 18.3P5.12.05 3.491.417.18.02 16.247.02.01 3.526.000.12.08 940.000 940.000 905.000 3.259.000 6.044.000 NOTA. — In the sum of £ 554.420.00.11, -advances in cash* are also the £ 492.247.33 »Relief CrediU which represents the value of some «war materials« delivered to Roumania after the 30 lone 1919. These materials were made during the war and kept in England till 1919. So that Roumanie received after this account: 1) Materials Jt 2.971.580.11. 9 2) Advances in cash » 554.420. 0.11 3) Relief Bonds account paid by the agreement of December 1924 2.2000.000.—.— The Roumanian Government made through its minister in London reserves about this account which it considers as a war debt jVotfl. — In this sum of 2.200.000 are also th e interests, the capital being of 1.956.33. 4) The repatriation "of the Roumanian Legion from Siberia £ Report . . . £ 137.533.-.— 5.863.533.12. 8 102 Report . . £ 5.863.533.12. 8 is deducted the credit account of Roumania: a) The value of the material from Arhangels taken by the English Armies . . £ 688.632.17. 6 b) By transfers of materials in England 167.523.18. 0 £ 856.156.15.6 Total . . £ 5.007.376.17. 2 Nola 1. — The credit acconnt is not complete. Nota 2. — From the general armistice (1918) and till February 1921, the Roumanian Legation in London paid intereste to the English Treasury in cash and bonds the sum of 2.107.677.6.5. Sterlings. C) Italy 1. Transfers of materials in conformity with the decision of Versailles, as also other services rendered to the Roumanian army aud to the Transylvanian le gion organized in Italy : The accounts accepted by the Roumanian commission It. I. 96.235.126.97 Accounts about which there have been reser ves made . „ 22.766.808.55 L. it. 119.001.935.52 is deducted the » creditor" account of Roumania (tran sfers of materials in France and Roumania as well as diffe rent credited sums) . . It. p. 2.409.354,52 is also deduc ted the value of materials transferred during the war which . has passed to the capital » 912.785, —It. p. 3,382.139.52 Remain Italian lire . . . 115.619.796.— or £ 4.584.440.10.7 d) America (United-States of North-America) (U. 8. A.) 1. Transfers made to the Roumanian army in confor mity with the decision of Versailles Dol. 12.922.675,42 Report . . . Dol. 12.922.675,42 Note. — Although this debt was contracted and is payable in the present currency of the creditor coun tries, this transformation into the strongest currency such as the pound sterling at legal parity, was effected only for the purpose of being able to make a globa estimate. Report . . . Dol. 12.922.675,42 2. Transfers made to the Rou manian Government for supply of provisions for the civil population and the army . 23.205.819,52 Dol. 36.128.494,94 is deducted the --creditor" ac- coount of Roumania: The value of the material ta ken from Arhangels by the Ame rican Armies) (The 339 th Infantry Regiment) „ 8.980,— The differrence resulting from the restitution of the flying mate rial taken by mistake by the Ame rican troops in France (In the sta tion Remorantin) » 11.500,— Difference in the calculation of the interests regarding the mili tary victualling -> 346,85 ~ 20.826,85 There is a debitor account of dollars 36.128.494,94 Less 20.826,85 Dollars . . . 36.107.668.09 -- £ Nota. — From Ihe report made by Mr. Eftimie Antonescu, the Rou- manai Delegate, We sec that at the, reception of the materials given by the United States there was noticed a miss of 65.568,79 dollars. RECAPITULATION The allied aid after the general Armistice a) France, French francs .... 121.354.522,71 or £ b) England » c) Italy, Italian lire 115.619.796,— » d) America, dollars 36,107.668,09 «_ 7.416.232.13.02 4.811.828.03.07 5.007.376.17.02 4.584.440.10.07 7.416.232.13.02 Total . . , £ 21.819.878.04.06 104 II. EXPENSES MADE FROM THE RESOURCES OF THE ROUMANIAN STATE A. In the Country 1. Cash. : Lei 4.932.320.182,69 for the needs of the army. » 2.715.743.196,31 » „ » » » land empoverished by the aimics of occupation. Lei 7.648.063.379,00 (one pound sterling- 400 lei) 19.120.158.00,00. Nota /. — This sum has been oblaiued 1'rom the following loans : n) bans after the armistice accorded by the banco Nationals (decre asing the monetary unification) Lei 3.774.008.579,— ti) The loan of the Union » 1 143.143.800,— c) The loan of the Restauration • 2.730.911.000,— Lei 7.048.003.370,- Nota 2. — The conversion of the sum of 7.048.063.379 in pounds sterling has been made at the rate of 400 lei= 1 £ sterling. As the pa ying of these sums will be male in a period of 15—20 years for the loans accorded by the Banca Na{ionala and in a period of 40 years for the sums of the loans of Union, and as on the other hand, the value of the leu will increase, the value of those expenses will be greater than the sum of : £ 19.120.158.00.00, which sum must be considered as a minimal value in pounds sterling. 2. Internal Treasury Bonds: Lei 685.500.000, 400 lei = 1 ^ £. 1.711.250 Xota. The sum ot these treasury bonds has served for the needs of the country empoverished by the enemies armies of occupation. 3) The consolidated Treasury : hilh £. 30.000.000. is deducted 15°/ 0 , that is to say £ 4.500.000, spent for restoration and which enters in the general account »losses« £ 4.500.000 Rest £ 25.500.000.00.00 4) The requisitions made in this period have been quoted to the sum of 1.000.000.000 lei . cash spent. Report ... £ 46.331.408.00.00 mm \ m 105 Report . In foreign countries Payments in cash from the resouces of the Roumanian States for the army: Pounds sterling ,£ 57.471.18.0 FrenchFrancs 42 961.819.74— £ 1.703.479. 2.3 Italian Pounds 475.135.—.— » 18.839.11 6 Yeni .... 134.748.83.— » 13.784.14.9 Dollars . . . 3.090.62.— - 634.15.9 £ 46.331.408.60.00 Total . 1.794.210.02.03 48.125.618.02.03 General Total Allied aid £ Expenses from the Resources of the country » £ * * 21.819.878.04.06 48.125.618.02.03 69.945.496.06.09 Besides these expenses made during the war, or for the war there are the ollowing : Losses In the Former Kingdom u) Losses after the lists presented to the Commission of Reparations Lei 31.099.853.761 b) Losses made by the Russians after the account of the Ministry of Foreign-Affairs » 10.596.867.330 c) The destruction of the z 1 Petroleum Industry : Private companies ... Lei 252.000.000 The State. The account is not yet established with the allies, and is at least equal to the former » 250.000.000 NOTA.—The account for the destruc tion of the States Petroleum Industry is not yet complete. Report ... Lei 42.198.721.091 T r j - * * 106 Report ... Lei 42.198.721.091 dj The anticipated replica tion of the Treaty of Bucarest French francs rate equal witli lei gold - 839.122.863 , 84.345.122 Total lei gold 43.122.189.076 — £ 1.709.697.536,5 add : a) Losses refering to the libe rated territories as well as va rious other losses, that is to say: 1. The losses of the Institu tions for orphans Lei 84.000.000,— 2. Losses of the Institutions of maintenance of war inva lids ,, 167.400.000,— 3. The maintenance of the hospitals in the watering places -> 84.000.000,— 4. Compensations and pen-' sions » 173.052.000,- Total Lei 508.452.000,— or at 400 lei =1 Pound sterling £ 1.271.130,00 b) The British corn paid by the Roumanian States in conformity with the special convention, notwithstanding that the greater part of this corn was taken by the Germans, was burnt by the allied missions or was requisitioned by the Rus sian Armies. NOTA. The talae of this corn in Pounds sterling 5.948.985.18.09 is contained in the external consolida ted Treasury bills, (see the respective paragraph). RECAPITULATION OF THE WAR LOSSES a) Losses in the former Kingdom £ 1.709.697.536,05 b) Are added various losses and expenses . . » 1.271.130,00 Total of the losses . . . £ 1.710.968.666,05 * -JV yT GENERAL RECAPITULATION OF WAR EXPENSES AND DAMAGE i. Preparations for the war Aid from allies ^ 8.462.046.10. 9 Expenses out of the ressour- ces of the country ... £ 29.583. 8. 1 « II. The general war Aid from the allies . ... £ 41.980.928.14.11 From the ressources of the country £ 78.737.186.19. 6 III. Continuation of roumania’s war Aid from the allies . . From the country . . Total . . £ 21.817.878. 4. 6 . £ 69.945.496. 6. 9 . £ 72.262.853.10. 2£ 178.265.832.14. 4 IV. Damages £ 1.710.965.666.05 Summed up: a) Aid from the allies . £ 72.262^.853.10. 2 b) From the country £ 178.256.832.18. 4 c) Damages £ 1.710.968.666. 5. 0 General total . . . ^1.961.497.352. 9. 6 Note.— la shis figure are not included the interests except the sum paid to the British Treasury by the Roumanian Legation in London, part in specie out of the credit of L. st. 7.000.000 and L. st. 5.000.000 which were put at their disposition by the Bank of England partly in discounted bonds until Febr. 5 th 1021. These payments were effectued as follows: a) interests paid in cash in August 16 th 1916 L. st. 379.897. 5. 1 b) Interest paid in cash from August 16 lh 1916 till General Armistice » » 1.941.225.12. 1 c) Interest paid in cash and bonds since the General Armistice till Febr. 5 th 1921 “ -- 2.107.677. 6, 5 Total . . . L. st. 4.428.800. 3. 7 To this figure we must add L. st. 243.867. 9. 0 Interest paid and Treasury bonds through the relief bonds arran gement of Dec. 1921. Total of the interests paid effectively to the British Treasury • L. st. 4.672.764. 3. 7 On interest reckoned by anticipation by the diferent allied Treasuries, and on all the interests claim ed for war debts the final situation has lobe established subsequently and settled at the sane tume as the general interallied accounts. 108 GENERAL OBSERVATIONS ON ROUMANIa’s WAS CHARGES We showed that Roumania’s war charges amoun ted to - - Of which : 1. The expenses for war proper amount to : a) Allies aid Æ b) Proper resources ” Total . . . £ 2. War damages £_ 3. Out of these war expenses Roumania supported 1.961.497.352.0.9 72.262,853.10. 178.265.832.14. 250.528.685.24. 1.710.968 666. 5. 2 4 6 9 71 2°/ 0 £ 178.265.832.14. 4 The allies aid was 28 8 °/ 0 £ 72.262 853.10. 2 4. Divided over the whole amount of war charges of » 1.961 497.352. 0. 9 The aid given by she allies is reduced to 3 7 °/ 0 while the el tort of the Roumanian State is 96 3°/ 0 that is: 1/27 part of the allies ; 26/27 supported by Roumania. 5. Reckoning the days of mobilization made by the Roumanian elfort in the war period we find that Roumania had a minimum of 1.000.000.000 days of mobilization. We arrive at this figure counting an effective average of 500.000 men mobilised from Aug. 15 th 1916 to March 31 1921 when the army was i mo bilized (total 1.700 days a year*) The 1 milliard days with which Roumania contributed to the common victory divided over a population of 8 million inhabitants, makes an averagi of an effort of 125 davs of mobilization for each inhabitant, or 1 •000 da\s lm each man fit for the military service, that is three years oI mobilization sot each valid man. That is why the taking up ot all the available labouring men w as a great trial for the national production ot that timee. These 1.000.000.000 days cost the Roumanian State £ 226.914.519-17-9 which comes to 4 , / 2 shilling a day per man, war proper expenses without coun ting the losses suffered by the Roumanian nation from direct consequences of the war, and without adding the lack of production ot the count: \ during that time, which was caused by the mobilization of all its vital foices, and the con ditions in which it went to war. *) Were added. ... . a) The concent -ations days daring the preparation period for the military instruction "f the troops and reserve officers, and for carrying out the fortification works ; b) The days for the miinten'ng of the youths from 17 to 20 years old who were evacuated into Moldavia, after M untenia had fallen into the hands of the enemy ; c) The days of mobilization of the workmen, used for the industry as fur instance the requisition of the population for the needs of the war. The diminution of the effective forces which took place after the forced signature of the Buearest peace, until the mobilization of the Rmmanmn army in November 1918 war over and above compensated, by the ex. cess of the effective forces, mobilized during the first part of our war when we put on a war footing 830.0,00 and of the non combatants during the retreat to Moldavia. h % * «< * V j t > ; I 109 The expenses on lite Western front are on an average greater. This statement must not be taken as an economy realized by the Rou manian State on its general expenses for the war but rather as a criterium of the special conditions in which the Roumanian army made the war. 6) Reckoning also the war damages, the effort of Roumania, divided over each day of mobilization amounts to nearly 1 y 2 ,£, that is a considerable sum compared to the average war expenses on the other fighting fronts. 7) Besides these charges born for the greater part by a population of only 8 million souls, Roumania lost: a) 350.000 soldiers that is 40°/ 0 of the whole effective force mobilised. b) 450.000 civilians dead by disease or other causes arising directly from the war, that is in all 800.000 dead or 10°/ 0 of the population of the former kingdom. These losses in men, added to the ,£ 1.937.882.264.2.9 which represent the expenses and the damages of the war, characterize the effort made by Rou mania, and constitute a claim not to be discussed which gives her the right of demanding a special attention, and a better treatment in the settling of the debts she was obliged to contract for them, in order to fulfil the charge she took on herself when she entered the war with them. From what we have pointed out in the general account Roumanis’a interallied debt may be summed up as follows : SCHEDULE SUMMING UP OF ROUMANIAN’S INTERALLIED DEBT ') IN POUNDS. FRANCE ENGIAND ITALY 1914/16 110.000.000.00 4.100.436.10. 9 1916/18 783.276 262.57 8.500.000.00 27.652.236.00 8.097.977.17.10 =) 972.705.00 1918/21 120.908.718.71 2 ) 2.807.376.17.02 22.200.000 OO.OOU 22.766.808.55°) 92.852.987.45-) 120.908.718,71 17 205.791.05.00=) * * * 116.592 581.00 AMERICA 36.107.668,09«) 36.107.668 09 i) Till the verification of the accounts, these figures are provisional, i) This sum was found by deducting out of. 121.354.522.71 445.804 (0 aid to the Nansen, a debt lequidated in London by the agreement of Dec. 1924 for relief 2U908i718i7R bonds. nd With the reserves made on these figures till their final verification from the following schedule we will see thai the debt of Roumania amounts to about the following amount principal. 17 million pounds sterling 36 » dollars 1.050 » French francs 116 » It. lire z Considering the diversity of the currency in which these debts are expres sed, and the diversity of their relation to gold parity, their addition in an accountable manner cannot be done, but simply a comparative account on the basis of legal parity. The Roumanian State as was shown in the contents of the report to the counsel of Ministers, as well as in the two memoirs (on the reparations and the interallied debts intends to proceed to settle these debts, taking into account the special circumstances in which they were contracted, of their quality of poli tical war debts, and of the conditions in which Roumania carried on the war, by the prolongation of her war, and by the fact that the supplies she made after the general armistice, were a direct consequence of her speculation by the enemy ; at the same time Roumania intends to settle the question of her in terallied debts, with the question of the reparations as she showed in this report. Her possibilities for paying is the principal criterium which must rule the liquidation of these debts. To take no notice of this possibility would mean to put aside from the beginning the possibility of fulfilling the arrangements which might be agreed upon for settling these interallied debts. The Roumanian State intends to proceed to settle all its interallied debts. Only by joining all these debts together can they be settled in a lasting manner, seeing that the arrangements made in respect of some of them might influence the payment of others. 3 ) This sum was obtained by taking ont of: 9.451.173.13. 4 1.353.195.15.8 paid to the different departments, by the Roumanian Legation in London ont of the varions 8.097.977.17.10 credits placed at its disposition at the Bank of England on account of material supplied to the Roumanian army during the war. 4 ) Relief bonds the capital benig £ 1.956.133 and the rest interest. According to the information of the Roumanian delegate in London the English account at present is : £ 4.311.814 material; » 12.260.144 advances; . 2.200.000 Relief Bonds. £ 18.771.958 6 ) On this sum of 22.766.808,55 the Roumanian Government makes reserves till an arrangement with the Italian Government is made. t) This sum was obtained by taking ont of 96.235.126,97 the following sums : 972.785 passed to war time expensis. 2.409.354,52 Ron manias creditor account. 8 ) With reserves for 65.568.79 dollars. Ill Taking notice however of the declarations of the United States of America government, and ot the tact that that State observes a very reserved attitude regarding the reparation problem, the Roumanian State from the point of view of the forms, must first settle its debt to the United States on the basis of its possibilities, and in connection with those of Roumania’s other interallied debts which are much larger. It will be necessary also at the same time, to see what interest will be payable from the moment when it will be decided that these debts should be paid. Likewise the Roumanian State intends at the same time as it arranges its interallied debts to review the provisional arrangements made by Roumania, with reserves for some of the war debts. And at last some o! our claims against some of our allies caused by the destruction ot our oil fields and the issue of Banca Generala notes must be considered. Roumania believing in the spirit of justice of loyalty and of equity of her great allies intends to proceed within the scope of these observations to settle her interallied debts. si' MW SUMMARY THE REPORT OF THE MINISTER OF FINANCE TO THE COUNSEL OF MINISTERS ON THE SITUATION OF ROUMANIA CREATED BY THE REPARATION AND INTERALLIED DEBTS POLICY Report presented to the Counsel of Ministers. The policy of Roumania’s interalliied debts within the scope of the reparation policy PART I The situation of Roumania in presence of the Treaties of Peace and of the conventions and agreements which followed those treaties INTRODUCTION. CHAPTER I. General considerations on Roumania’s war. Section J : Armed neutrality period (1914—1916). Section II: The war period (1916—1918). Section III: The continuation of the war (1918—1920). CHAPTER II: Roumania’s rights to reparations according to the Treaties of Peace, the con ventions and the agreements concluded. Section I: Treaty concluded with Germany (Treaty of Versailles June 28“* 1919. I. Damages sufered by Roumania. II. Special claims of Roumania. III. Application of the provisions of the Treaty of Versail les as regards Roumania. Section II: Treaties concluded with Austria and Hungary and their appli cation (Treaty of Saint Germain en Lay e [Sept 10 th 1919) and the Treaty of Trianon (July 4 th 1920)and the decisions of the Commission of reparations). Section III: Treaty cone uded with Bulgaria and its application Treaty of Neuilly Seine (Nov. 27 th 1919) and the Sofia Protocol March 2* 1923. Section IV: Treaty concluded with Turkey and its application. Treaty of Sevres Aug.: 10 th 1920, and Treaty of Lausanne July 23 rd 1923. CHAPTER III. Special rights of Roumania deriving from the Treaties. Section I: Restitutions. I. Agreements with Germany. II. Agreements with Austria. III. Agreements with Hungary. IV. Agreements with Bulgaria. SocMon H: Liquidation of the property, rights and interests of enemies existing in the Romanian teritories. Section III: Acquiring the property, rights and interests of Hungarian and Austrian national undertakings of public utility in the freed territories. I. Austria., II. Hungary. Section TV: Property belonging to institutions and foundations of the freed territories existing at present in other territories of the former Austro-Hungarian Monarchy. Section V. The rights of Roum tnia in the rolling stock in proportion to the Railway lines in the new territories. CHAPTER IV. Ronmania’s obligations deriving iirom the treaties ok peace. Section I. Special obligations deriving from the Treaty of Trianon. Section II. Common obligations deriving from the Treaties of Saint Germain and of Trianon. I. The exchance of the kronen circulating in the freed territories. [I. Liberation'Quota. HI. Value of the transferred property. IV. Ronmania’s quota in Austro-Hungary’s pee-war public debt. CHAPTER V. Ronmania’s obligations deriving not from the Treaties but by cause of the war or of situations created by the dismemberment of the Austro-Hungarian Monarchy. CHAPTER VI: Ronmania’s obligations deriving from the „de jure" succesion of Austro- Hungary. CONCLUSION. part II. The interallied debts for financing Rouinania’s war CHAPTER I: Armed neutrality period 1914—1916. Section 1: Roumania’s contribution for the cause of the allies. Section II: The financing of the armed neutrality period. I. Loan in Italy. II. Loans in England. III. Loans in France. CHAPTER II: The war period (1916—1918). Section I: Roumania’s contribution. I. The Britannic corn. II. Destruction of the oil industry. Section ; II. The retreat to Moldavia. Section III. The Finance of the war (Aug: 1916—Nov: 1918). I. Credits granted by great Britain. II. The issue of English French and American drafts. 115 CHAPTER III. The period oi the General Armistice. Section I. The continuation of the war (Nov: 1918—MarchT921). Section II, Financing the period after the armistice. I. Issue of the National Bank. II. Internal loans. III. Advances granted by the allies. IV. Issue of external treasury bonds. V. Advances made by the international Committee of Re lief bonds. CONCLUSION. * ■ i —^— a-' X-Z ■, : : ,' V : ms v '•s i fg ? r T ' V.'i ÆX„ Jj-jite K *^\ . * ' v^-V 206! 106152945 4- 83 r Ol CD fesouerces on a count of the great member of Russian troops which were Decoming regular bands of robbery and destruction. In virtue of this arrangement the representatives of the United States of ►England and of France were authorized to hand to the Roumanian Government Irafts in order to procure in Russia necessary supplies for the population and he army. These drafts were to be negotiated by the Interallied Commission in Russia and their produce was to cover the price of purchases made for supplying :„;he country and the army: For this object were issued: By the French Government through Mr. de St. Aulaire French francs : 5.500.000. By the English through Mr. Barclay £. 600.000. By the American Government through Mr. Wopika S' 5.000.000. Out of these drafts only the French ones for 3.000.000 francs were nego tiated at the beginning and used for paying supplies, the rest of 5.500.000 | ^rench francs in drafts, by cause of the events in Russia there being no sufficient yarantecs for depositing supplies or buying goods for immediate use, served kith the consent of the representatives of the Allies as metallic stock for the ssue which the National Bank consented to make for the government which >aid the supplies for the army and the country from Bessarabia. During all this Deriod the Allied govenments were hoping that the Russian front would be 'eformed by the action in Ukraina, no longer asked Roumania to go on resis- ing but still helped her for getting supplies from Bessarabia which was practi- ‘.ally separated from the anarchy of Russia by the Moldavian National movement. If was only under the Marghiloman government that some of the Allies nade reserves on the use of these drafts on account of the political situation ind of the attitu le which that government adopted under the pressure of general Itackensen. These drafts are binding in the same way as the other English advances ind are included within the frame of the Interallied debts. As we shall see lower down the English and American drafts have been ^k’ithdraws (anex 20) or annulled and the issue of the National Bank based m these drafts remained completly uncovered. Therefore in this period of the war the financial operations which influenced )ur present financial situation are the following : 1. The guarantee of the issue for internal needs by England. 2. Special drafts which were used either directly or for issue made in view >f supplies in Russia or in Bessarabia. 3. The regular war contribution levied by anticipation by the enemy who ssued in the occupiei territory Banca Generala notes and confiscated the sums leposited by the National Bank at the Reichs Bank. 4. The consequences of the application of the Treaty of Bnearest which ikewise in the shape of supplies of cereals horses etc., a regular fresh war contribution.