800.51 Johnson Act/160

The Secretary of State to the Chairman of the Securities and Exchange Commission (Douglas)

My Dear Mr. Douglas: I have received Mr. Bane’s letter of October 26 requesting a list of the names of such countries as are in default in their payments on obligations to this Government.

The Annual Report of the Secretary of the Treasury for the year ended June 30, 1936 contains on page 450 a table entitled “Securities Owned by the United States Government, June 30, 1936”, which lists foreign obligations under the three subheadings of “Funded Indebtedness”, “Unfunded Indebtedness”, and “German Bonds”. A table on page 78 of the same report lists the amounts due and not paid, as of November 15, 1936, on the indebtedness of foreign governments to the United States under the funding and moratorium agreements. The German bonds are discussed on page 79 of the same report. The three governments listed on page 450 as having unfunded indebtedness, namely Armenia, Nicaragua, and Russia, have also been listed in certain Treasury statements covering indebtedness to the United States on which payments have not been made according to contract terms.

The list of countries in default on their indebtedness to the United States, as compiled from the Treasury publication, is the following: Armenia, Austria, Belgium, Czechoslovakia, Estonia, France, Germany, Great Britain, Greece, Hungary, Italy, Latvia, Lithuania, Nicaragua, Poland, Rumania, the Soviet Union, and Yugoslavia. In the case of Armenia it should be explained that at the time the debt was incurred its status had not been definitely determined. It is not to be regarded as an independent state, and is here mentioned merely as of possible interest.

This is the list of countries, so far as is known to this Department, which may be regarded as being at present within the effects of the Johnson Act, approved April 13, 1934. In case any question regarding Nicaragua should come before the Securities and Exchange Commission in this connection, it may wish to inquire particularly into the status of Nicaragua, since there is a possibility that the indebtedness of Nicaragua may be offset against certain claims of the Government of Nicaragua now under consideration in the Internal Revenue Bureau of the Treasury Department.9

Sincerely yours,

For the Secretary of State:
Sumner Welles
  1. The Nicaraguan indebtedness in question was cancelled pursuant to agreement of April 14, 1938, between the United States and the Republic of Nicaragua, ratified by the United States Senate on June 13, 1938; see Annual Report of the Secretary of the Treasury, 1988, pp. 81, 300, 301, and 548. See also Department of State Treaty Series No. 937, or 53 Stat. 1573.