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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.