World War Foreign Debts Commission Act
Encyclopedia
The United States Congress
authorized the creation of a World War Foreign Debts Commission under Secretary of the Treasury Andrew Mellon to negotiate repayment agreements with Great Britain
and France
. 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 1st 10 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 1st 5 years of payment. It was then to be increased gradually to 3½%.
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
authorized the creation of a World War Foreign Debts Commission under Secretary of the Treasury Andrew Mellon to negotiate repayment agreements with Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...
and France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
. 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
Interest rate
An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...
reduced from 5% to 3% for the 1st 10 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 1st 5 years of payment. It was then to be increased gradually to 3½%.