World War Foreign Debts Commission Act
The United States federal World War Foreign Debts Commission Act of February 9, 1922 authorized the creation of a commission, working under Secretary of the Treasury Andrew Mellon, to negotiate repayment agreements with Great Britain and France in the aftermath of World War I. [1]
The Commission placed the Allied debt principal to the United States at $11 billion; payments were to be made in graduated 62 annual installments; however, the accrued interest on these payments over a period of 62 years would have increased the debt to approximately $22 billion, although the U.S. did agree to lowered interest rates. Great Britain’s debt was reduced 19.7% to $4.6 billion with the interest rate reduced from 5% to 3% for the first ten years of payment to be raised to 3½% thereafter. France’s debt was reduced by 52.8% to $4 billion, without any interest for the first five years of payment. It was then to be increased gradually to 3½%.
References
- ↑ Wood, Robert (1986). From Marshall Plan to Debt Crisis: Foreign Aid and Development Choices in the World Economy. University of California Press.