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LONDON:
PRINTED & PUBLISHED BY HIS MAJESTY'S STATIONERY OFFICE
To be purchased through any Bookseller or directly from H.M. STATIONERY OFFICE
at the following addresses : Imperial House, Kingsway, London, W.C.2, and

28 Abingdon Street, London, S.W.1; York Street, Manchester;
1 St. Andrew's Crescent, Cardiff; or 120 George Street, Edinburgh.

1923

Price 30. net.

Cmd. 1912.

PROPOSAL dated the 18th day of June, 1923, by His

Britannic Majesty's Government (hereinafter called
Great Britain) to the Government of the United
States of America (hereinafter called the United
States) regarding the funding of the debt of Great
Britain to the United States.

WHEREAS Great Britain is indebted to the United States as of 15th December, 1922, upon demand obligations in the principal amount of $1,074,818,358.44, not including obligations in the principal amount of $61,000,000, representing advances deemed to have been made to cover purchases of silver under the Act of Congress approved 23rd April, 1918, of which $30,500,000 has been repaid in April and May, 1923, and the balance is to be repaid in 1924 pursuant to an agreement already made between the parties, and Great Britain is further indebted to the United States as of 15th December, 1922, on account of interest accrued from 15th April and 15th May, 1919, on said $4,074,818,358.44, principal amount of demand obligations.

AND WHEREAS Great Britain has power under the War Loan Act, 1919 (9 and 10 Geo. 5, cap. 37) to issue securities in exchange for maturing securities issued under the War Loan Acts, 1914 to 1918:

AND WHEREAS the demand obligations now held by the United States Treasury were so issued, and will become payable upon the request of the United States Treasury for their payment :

Now THEREFORE Great Britain proposes, in the exercise of the powers above recited and in consideration and in faith of the statements, conditions, premises and mutual covenants herein contained, to issue to the United States in exchange for the demand obligations now held by the United States Treasury securities which shall be in their terms and conditions in accordance with the following provisions : 1. Amount of Indebtedness.

The total amount of indebtedness to be funded is $4,600,000,000 which has been computed as follows :Principal amount of de

mand obligations to be funded

$4,074,818,358.44 Interest accrued thereon

from April 15 and Mav 15, 1919, respectively to December 15, 1922, at the rate of 41 per (ent.

per annum

$629.836.106.99

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2. Issue of Long-Time Obligations.

The securities, which it is proposed to issue at par as promptly as possible, shall be obligations in the principal amount of $4,600,000,000, in the form of Bonds to be dated 15th December, 1922, maturing 15th December, 1984, with interest payable semiannually on 15th June and 15th December in each year at the rate of 3 per cent. per annum from 15th December, 1922, to 15th December, 1932, and thereafter at the rate of 3.3 per cent. per annum until the principal thereof shall have been repaid. 3. Method of Payment.

The Bonds shall be payable as to both principal and interest in United States gold coin of the present standard of weight and fineness, or its equivalent in gold bullion, or, at the option of Great Britain, upon not less than thirty days' advance notice in any bonds of the United States, issued or to be issued after the 6th April, 1917, to be taken at par and accrued interest to the date of payment hereunder : provided however that Great Britain may at its option, upon not less than ninety days' advance notice, pay up to one half of any interest accruing between 15th December, 1922, and 15th December, 1927, on any British bonds proposed to be issued hereunder, in bonds of Great Britain, maturing 15th December, 1984, dated and bearing interest from the respective dates when the interest to be paid thereby becomes due, and substantially similar in other respects to the original bonds proposed to be issued hereunder.

All payments to be made by Great Britain on account of the principal or interest of any bonds proposed to be issued hereunder,

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shall be made at the Treasury of the United States in Washington, or, at the option of the Secretary of the Treasury of the United States, at the Federal Reserve Bank of New York, and if in cash shall be made at the option of Great Britain in gold coin of the United States or in gold bullion or in immediately available funds, or if in bonds, of the United States, shall be in form acceptable to the Secretary of the Treasury of the United States Treasury. Appropriate notation of all payments on account of principal shall be made on the bonds proposed to be issued hereunder which may be held by the United States. Provided, however, that all payments in respect of any market obligations issued under Paragraph 9 of this Proposal shall be made at the office of the fiscal agents of the British Government in the City of New York. 4. Exemption from Taxation.

The principal and interest of all bonds issued or to be issued hereunder, shall be exempt from all British taxation, present or future, so long as they are in the beneficial ownership of the United States, or of a person, firm, association or corporation neither domiciled nor ordinarily resident in the United Kingdom. 5. Form of Bonds.

All Bonds proposed to be issued hereunder to the United States shall be pavable to the United States of America, or order, shall be issued, so far as possible, in denominations of $4,600,000 each, and shall be substantially in the form set forth in the exhibit annexed hereto, and marked“ Exhibit A.” The bonds shall be signed for Great Britain by the Counsellor of His Britannic Majesty's Embassy at Washington. 6. Repayment of Principal.

To provide for the repayment of the total principal of the debt before maturity of the $4,600,000,000 principal amount of bonds to be issued, it is proposed that the bonds shall contain provisions the effect of which shall be that Great Britain shall make to the United States payments, on account of the original principal amount of the bonds to be issued, in the amounts and on the dates named in the following Table :

Annual instalments to
Date.

be paid on account of 15th December

principal. 1923

$23,000,000 1924

23,000,000 1925

24,000,000 1926

25,000,000 1927

25,000,000 1928

27,000,000 1929

27,000,000 1930

28,000,000 1931

28,000,000

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Date. 15th December :

1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978

Annual instalments to be paid on account of

principal.
$30,000,000
32,000,000
32,000,000
32,000,000
32,000,000
37,000,000
37,000,000
37,000.000
42,000,000
42,000,000
42,000,000
42,000,000
46,000,000
46,000,000
46,000,000
51,000,000
51,000,000
51,000,000
53,000,000
55,000,000
57,000.000
60,000,000
64,000,000
64,000,000
64,000,000
67,000,000
70,000,000
72,000,000
74,000,000
78,000,000
78,000,000
83,000,000
85,000,000
89,000,000
94,000,000
96,000,000
100,000,000
105,000,000
110,000,000
114,000,000
119,000,000
123,000,000
127,000,000
132,000,000
136,000,000
141,000,000
146,000,000

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