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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
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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 overcoming
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 deficient
budgets and at last the assuring by our own proper means of exinguishhing
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, whereas
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 internal
debt will be paid off.
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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, Roumania
was obliged to restrain all its wants and to demand sacrifices, especially
from two classes of citizens; the State Officials and pensioners, and those bavin"
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 continued
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 received
them from the enemies, endangering in this way her general finalicia
consolidation, or to assure first that consolidation, which means general prosperity,
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 industrial
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 paying
the war damages and satisfying in a very feeb'e measure the sufferers by anticipation,
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 reduced
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 financial
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 participated
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
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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 steptor
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 compromise
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 mentioned
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 consolidation
and I should say its evolution--. And the creditors and other States interested
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 explanations
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 Interallied
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 general
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 continual
infringement of this treatment of equality and equity which was provided
and which ought to have been respected in the application of the rights
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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 committed,
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 obligations
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 starting
point for the attitude of Roumania in these new phases in which the application
of the treaties enters. The interventions and the memoirs of the Roumanian
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 development
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 measures
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, forgetting
that they were closely bound to our enemies first fulfilling their obligations
reduced, put off completely for gotten: thus succesively by the Innsbruck agreement
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 adjournments
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 desiring
to limit thier action to the study of a single question the possibility of Germany
to pay, left the division of the sums paid by Germany and the establishment
and priorty of payments and the settlement of our special claims recognized
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 restoration
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 reparations
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
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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 character,
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 demands
that the settlement of the American loans be effected at the same
time as hers, not admitting that we should pay one creditor without considering
the rights of the others. Thus we are placed in face of the following situation:
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 statements
made in the memoirs and the documents which we publish, the situation
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 anything
from them, this question is still open and we have an interest in demanding
that it should be settled.
3. Although according to the Spa agreement, and by the different conferences
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 succeeding
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. Roumania
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 provided
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 extraordinary
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 derisory
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 contribution
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 demand
the settlement of the war debts of the allied states, has two effects as regards
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 consolidation
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 interallied
debt policy in three categories: the United states who do not intend to
connect the reparation policy with the interallied debts ; England who according
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 reduction
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 October,
in order to arrange with the Government of the United States of America
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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 carrying
on in England and the agreement made by Belgium in Washington, have
given certain precise indications on the intentions of these three principle creditors
of the Europeen states, they indicate also for us the necessity ol negotiating
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 important
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 inscribe
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 especially
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 damages.
The excesses given by our present budgets were not only the consequences
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 prices
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 important
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 currency
but of all the States that have done this, her currency is the weakest compared
to gold.
Therefore any obligation of payment abroad, now that her payment balance
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 external
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 monetary
consolidation and of our rate of exchange: the more facilities our creditors
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 situation
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, unfortunately
however her situation for some time will be such that the transforming
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-Hungarian
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 reparations
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 produce
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.
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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 signature
of the last Treaty of Peace, the state of uncertainty left by the application
of the treaties and their subsequent modifications necessitates an examination
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 recuperating
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, solidary
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 Balkanic
war, in which Houmania was obliged to take part in 1913, in order to
reestablish the equilibrium in Eastern Europe, where she represented the principle
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 Convention
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 stagnation
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 Roumania
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 preparatory
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 attitude
against the Central Powers, which were thus impeded in their communications
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 document
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 Bussiawhich
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 helping
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 Central
Powers from opening a route towards Turkey, Roumania concentrated
numerous troops along her threatened frontiers ever since the beginning
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 expenses,
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 conditions
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 mobilization
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 moment
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 territory,
became not only a charge, but even an additional danger 1 ).
Abandoned by her Eastern ally, isolated from her Western allies, surrounded
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 territory,
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 decisive
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 moment,
one of the most important riches of our country.
The sacrifice on the part of Roumania of her only source of combustible
was such a tremendous loss, that the allies acknowledged Roumania’s
title of creditor for the material losses she had suffered from this destruction
in the interest of the common cause, and they undertook to pay these damages
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 supplies
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 arrived
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, deposits,
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 conspicuously
if we consider that two thirds of the territory of Roumania was invaded
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 speculation
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 Berthelot,
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 Eastern
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, consisting
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 private
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 implicit
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 Roumania,
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 armistice
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 territory,
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 rebuilding
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 obligation
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 totality,
as being part of an indivisible whole. To modify some of them without adapting
the others, to relieve some without relieving the others, is both unlawful
and unjust.
To be able to explain as clearly as possible the situation created for Roumania
in the matter of reparations, we must examine the c'aims and the obligations
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 determined
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 associated
States, and by their subjects by reason of the war. (Article 23i).
Nevertheless considering that Germany’s means are" not sufficient for assuring
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 Commission
of Reparations, constituted in the shape and having the powers specified
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 disposes
in.express and categorical terms, that the succesive payments, — including
those mentioned in the preceding articles — destined by Germany,
should be distributed by the allied and associated Governments in certain proportions,
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 reparations,
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 armistice
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 enforcement
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 situated
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\ subsequent
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 Versailles
should be applied in the same proportion as for her great allies. In respect
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 administration
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 judicial
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 supreme
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 (German,
Austrian, Hungarian, Bulgarian, and Turkish); the railways worn out by
an intensive circulation, and left without repair and rolling stock *) the telegraph
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 destruction,
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 German
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 enabled
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 occupation,
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 enforcement
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 undertakes
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 convention,
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 nature,
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 article
259, § 6 providing Germany’s renouncing the advantages of the Treaty of
Bucarest, and her obligation of returning the goods delivered, proclaimed Roumania’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 Austria
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 carried
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 petroliferous
products, a circumstance which strongly diminished their power of
resistance (annexes 12, 13).
The destructions demanded by the allies, were executed under the supervision
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 national
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 demand
otthe allies and under their guard.
r l lie elective gold alone in national and foreign coin, belonging to the National
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 Roumanian
Crown jewels, the private jewels, public and private art collections, private
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 detention,
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 compensation.
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 Poland
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 September
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 reparations
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 President
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 application,
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 formula
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 reparations
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 objective
manner, the Spa agreement, and the debates which followed, on its iegistration
at the Commission of reparations, it clearly stands out, that no other interpretation
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 paying,
and not the total damages to which her obligation for reparations amounted.
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 forwarded
a list amounting to 31.099.853.761 lei gold, a list which was not contested
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, Hungary
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 estimated
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 Buc
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 presented
to the Commission of Reparations 31.099 milions lei gold.
2. Obligations imposelou Roumania by the Treaties
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 without
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 repations
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, Hungary,
Bulgaria 12 milliards
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 application
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 reparations,
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 defended
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 favorable
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 Bucarest,
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 Conference,
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 questions
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 Reparations
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 document
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 obligation,
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 regarding
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 special
claims.
The agreement concluded, entitled »Agreement regarding the distribution
of the annuities of Daiee's plan, January 14"' 1925“ is the last interallied document
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 reparations
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 Germany’s"
rights and obligations deriving from treaties, conventions and arrangements,
being in force at the time. This article introduced partly on our insistance
leave the rights which we have against Germany in respect of our two
special claims, that is the „Banca Generala« notes, and the anticipated enforcement
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 percentage
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 insistance
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 reduced'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 reparations,
a value ol 38.951.353,99 marks gold, for the period before the application
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 difficulties
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 railway
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 damaged
by the war, constitutes an evident injustice which could not pass unobserved,
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 Conference
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 reparations
(Annexes 30, 31, 33, 34).
Roumania and the succeeding States to Austro Hungary seeing the unanimity
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 obligations
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 expectations
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, provided
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 obligation
of a quite different character, which easing the situation of Bulgaria, charges
in the same proportion the situation of the allies, amongst which Roumania
comes in, who was expecting from the Bulgarian reparations, a corrective
of the injustice committed at Spa. This protocol drawn up without the participation
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 reparations,
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 fallowing
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 countervalue
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 Powers
who signed the Treaty of Neuilly, decided on July 27 th 1923, that the interallied
Commission of Sofia, was to determine the cost of the armies of occupation,
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 Commission
and the Bulgarian Government for the reimbursement of the occupation
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 Bulgaria
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 deposited
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 Baldwin
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, against
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 acknowledged
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 identify
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 analyze
the questions referring to restitutions, and to the other rights of the Roumanian
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 restitutions
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 naming
delegates of her own, for investigating and recovering, and she was therefore
obliged, to appeal to the assistance of the allies, delegates. Later on when
national restitution services were created, the identification operat'ons had become
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 investigations
for identifyind carried away property This attitude was justified
by the wish of saving the enemies incurring expenses in keeping up the restitution
services, which operated on their territory.
In these conditions Roumania concluded lump agreements giving up looking
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 stallions
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 agreement
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 Agriculture.
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 reparations,
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 Roumanian
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 Government
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 merchants
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 furnishing
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, especially
as the proceeds of this liquidation are destined, according to the terms
of the Treaty, in the first place for compensating Roumanian citizens who suffered
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 arisen,
if the Commission ok Reparations had kept within its role, of simple mandatary
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 territories,
gave the right to the allies, and consequently to Roumania also, to obtain
on occount of the Hungarian and Austrian reparations the propel H, lights
and interests, which Hungarian or Austrian dependents possess in the undertakings
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 contestations
an incomplete list of these properties rights and interests, and Roumania
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 renounce
the right of intervention which it has under the above article still Rouraania
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 article
194, in producing the list of property, rights and interests which the Hungarian
dependents had in the undertakings of public utility, in Ardeal and Bukovina.
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 nationalizing
the undertakings of public utility in Ardeal, can not give up her right, and
insists on the Commission of reparations, demanding and obtaining from Hungai
\ the list of properties, rights and interests, which the Hungarian dependents
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 granted,
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 remitting
all properties rights and interests, belonging to institutions, foundations
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 States,
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 propel
t) belonging to Roumanian foundations, and of which Roumanian nationals
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, foundations
and collectivities no final decision can betaken for dividing the Austrian
and Hungarian public debt, as in the patrimonium of these institutions, foundations
and collectivities, besides immoveables and other property there are also
governement bonds which being divided must be incorporated in the Roumanian
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 public
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 carrying
it out, between the newly created States, or those which have acquired territory
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 Commission
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 engines
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 provided
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-Hungary
in proportion with the respective numbers transferred.
D. The division of the expenses incurred by this distribution. The Roumanian
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 attributed
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 Commission)
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 Roumanian
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 estimation,
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 Hungary,
or for being divided between all the allied and associated States in proportion
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 Commission
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 established
by the Vienna Commission and ratified by the conference of the ambassadors.
1 ho Hungarian Administration therefore must be obliged to communicate
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 Reparations
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 answers
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 Roumanian
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 creating
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 attempted
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 Hungarian
and Roumanian Governments, the matter was finally settled by both
parties reciprocally renouncing article 181. The arrangement betwen M" Titulescu
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 Hungary,
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 during
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 conference
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, circulating
in the freed territories.
This obligation was carried out to the letter with heavy sacrifices, considering
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 occupation,
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 roubles
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 contribution
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 contribution
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, stipulated
outside the treaties, at the time the treaty of Saint Germain with Austria
was signed at a time when the fundamental principle of the treaties—(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 liberation
of the territories of the former Austro-Hungarian Monarchy", with the
modificatory declaration of December 8 1,1 1919, accepted by Roumania on December
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 territories
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 distribution
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 modificatory
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 securities,
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, expected
the effective payment of these quotas, in contradiction to the terms of articles
3 and 4 of the arrangement mentioned above.
In fact article 3 stipulates. -The sums due by each of the States as provided
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 Reparations,
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 determined
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 payments
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 communes
and other autonomous local institutions as also of schools and hospitals
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 inventory
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 estimating
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 interpretation
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 interpretation
could-be extended to any length so as to consider as riches to he transferred
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 considering
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 nationals.
. . , . ,
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 Hungary
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 Commission
of reparations, on this occasion we had to observe that seeing the continual
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 Hungary
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 conditions
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 obligation
and is expounded in a memoir of the Roumanian delegate at the Commission
of reparations (Annexe 74.)
From the works of the Commission of reparations for determining, estimating
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 transferred
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 mandate
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 supported
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 obligation
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 determined.
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 aiticle
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 regards
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 present
under thai Protocol.
The provisions of the Innsbruck Protocol and the organisation of the»Common
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. Roumania
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 damages
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 justification,
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 administration
debts, which were contracted before the war, by the different administrations
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 administration
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 generosity
has taken upon herself. In exchange no sum was granted to the Roumanian
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 Treaties
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 assist
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 railways,
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 defficiency,
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 necessary
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 inheritance
can be gathered from the examination of the table of the approximate
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 indivisible
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 reparations
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 considered
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 delayed
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 transferred
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 Monarchy
have been obliged, besides returning the value of the transferred property
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 proceeded
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 hostile
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 inflation
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 obligations
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 financial
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 Bulgaria
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, Roumania
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 provided
in Dawe’s plan about 51 million marks gold.
In the hypothesis officiously put forward of the allies claims against Germany
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 leparations
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 bearing
any interest to 1953 while the other fraction of 550 millions was divided
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 enforcement
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 diference
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 million
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 reparations,
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 according
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 kronen
(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 exchange
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 liquidation
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 Government
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-Hungarian
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 eloquence
of its figures the situation in which Roumania remains alter the 1 ieaties
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 proportional
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 negative
balance of the reparations created by the Treaties, we must remark that
this territorial increase is owed to the application of the principle of nationalities,
by the annexation of the provinces belonging to Roumania. Now the application
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 situation
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 principle
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 resources
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 financial
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 independent
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, allowed
Roumania to complete her national unity, she is not at all in the pleasant
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 Roumania
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 natural
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 Danube
and the granting ol the mouths of this river to its natural hinterland.
she present system of Roumanian railways consists in four different branches
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 crossing
the Tcheco Slovak territoires, situation that cannot be admitted any longer,
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 complex
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 economical
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 population
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 terntones.
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 smaller
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 situation,
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 concentrating
her forces along the frontier so as to prevent encroachments both for strategical
or any other reasons. The display of these forces represent the first material
sacrifices Roumania made. Parellel with the priceless tribute of her neutrality
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 consciences,
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 organizations
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 publications,
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 organizations
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 marked
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 withdraw
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 government
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 operation
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 geographical
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 Roumania
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 national
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 contracts
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 application
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 army
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 departments.
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 supplying
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 justification
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 Government
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 coordination
of the financial action ofthe allies, nevertheless the fact that they consented
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 entrusted
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 convention,
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 practically
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 modern
war apparatus, to conquer inch by inch and after hard struggles the mountain
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 especially,
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 renewing
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 special
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 falling
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, together
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 Bucarest.
(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 prisoners
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 subsequently
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 destroying
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, neither
did she doubt that one day or another the damages produced by this measure
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 transporting
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 production,
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 national
economy, as it was the principal national combustible. Even it immediately
after the war, we would have had the neccessary sums for restoring to working
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 damage
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 destruction.
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 production.
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 consideration
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 privileged
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 Roumanian
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, ravaged
by diseases brought for the greater part by the Russian armies, the Government
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 belief
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 foundation
of the State would suffer no change, the Roumanian Government still hesitated,
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 dangerous
consequences, the Roumanian Government was obliged to proceed with the
greatest prudence to disarm and to send towards the frontier appioximatlvely
a million meu which had consumed the last reserves ol food in Roumania.
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 imposed
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 herself
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 Roumania
had been completely laid waste and sacked by the Central Powers, according
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 inhabitants
(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 country
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 organizations
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 administration
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 Gommissaires
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 questions
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, Roumania
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 manoeuvres
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 retreat
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 completely
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 metallic
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 possibility
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 mobilized
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 agreement
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 exception,
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 procured
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 without
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 subsequent
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 representatives,
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 negotiated
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 resisting
but still helped her for getting supplies from Bessarabia which was practically
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 afterwards,
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 demobilized
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 vanquished
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 agricultural
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 inhabitants.
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 Ungarian
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 Roumanians
of Transylvania under the leadership of the National Committee organized
national counsels and national guards, officially recognized by the Hungarian
war office (order given in Buda-Pest on the 12 th 1918). This however
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 Transylvania
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, modifies
the first article of tlie convention of Belgrade and decides that the Roumanian
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 arriving
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 military
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 attended.
(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 occupying
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 Hungary
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 under
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 Treasury
Bonds of the Roumanian State.
2) By internal loans.
3) By advances granted by the Allies in the shape of armamant, war material
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 unilication
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 consolidated
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 material
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 during
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 decision
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 greater
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 cunencies,
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 international
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 discussed.
The general lines of the programme to be realized and the mode
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 humanitarian
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 conference
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 repreents
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 America
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 speciel
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 Committee
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. Titulesco
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 honourable
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 England
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 abandoned
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 material
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 national
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 together.
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 resources
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 unsufficient
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 former
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 former
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 victorious
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 situation
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 expenses
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 reimbursed
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 military
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 organized
by the General damn. » 18.459.521.54
Frcs. 907.126.638.64
is deducted the material
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 account
of Roumania (the value
of the material from Archangel
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 accorded
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 Petrograd
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 deyear
ferent English departe- advances in cash L. st. Total Debit tained by the English Treaments
(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 Roumanian
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 Departments
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 makes
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 Government
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 »Barklay*
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) American
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 fitting-out,
aliments, maintenance
in hospitals,
expenses for repatriation,
etc., made with the
Roumanian prisoners in
Germany . . Frs. 12.384.552,84 125.180.945,06
Is deducted the credit account of Roumania
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 countries,
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 prisonners
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 legion
organized in Italy :
The accounts accepted by the Roumanian
commission It. I. 96.235.126.97
Accounts
about which
there have
been reserves
made . „ 22.766.808.55 L. it. 119.001.935.52
is deducted the » creditor"
account of Roumania (transfers
of materials in France
and Roumania as well as different
credited
sums) . . It. p. 2.409.354,52
is also deducted
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 conformity
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 countries,
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 Roumanian
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" accoount
of Roumania:
The value of the material taken
from Arhangels by the American
Armies) (The 339 th Infantry
Regiment) „ 8.980,—
The differrence resulting from
the restitution of the flying material
taken by mistake by the American
troops in France (In the station
Remorantin) » 11.500,—
Difference in the calculation
of the interests regarding the military
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 Roumanai
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 (decreasing
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 paying
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 destruction
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 replication
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 liberated
territories as well as various
other losses, that is to say:
1. The losses of the Institutions
for orphans Lei 84.000.000,—
2. Losses of the Institutions
of maintenance of war invalids
,, 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 Russian
Armies.
NOTA. The talae of this corn in Pounds sterling 5.948.985.18.09 is contained in the external consolidated
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 ressources
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 arrangement
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 amounted
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 mobilized
(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 counting
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 conditions
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 Roumanian
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 Roumania,
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 expressed,
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 political
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 interallied
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 conventions
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 Versailles
as regards Roumania.
Section II: Treaties concluded with Austria and Hungary and their application
(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 Relief
bonds.
CONCLUSION.
*
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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 negotiated
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 resising
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.