Memorandum Appendix XXI. Russian-German Financial Agreement, August 27, 1918.
RUSSIAN-GERMAN FINANCIAL AGREEMENT, AUGUST 27, 1918.
(Izvestia, September 4, 1918.]
The Financial Agreement supplementing the Russian-German Supplementary Treaty to the Treaty of Peace between Russia for the one part, and Germany, Austria-Hungary, Bulgaria, and Turkey for the other.
On the basis of paragraph 2, article 35, of the Russian-German Supplementary Treaty to the Peace Treaty concluded between Russia for the one part and Germany, Austria-Hungary, Bulgaria, and Turkey for the other, the plenipotentiary of the Russian Socialist Federated Soviet Republic, namely, the diplomatic representative of the Soviet Republic accredited to the Imperial German Government, M. Adolf Joffé, and the plenipotentiaries of the German Empire, namely, the Secretary of State for Foreign Affairs, Imperial Privy Councillor, Rear-Admiral M. Paul von Hintze retired and the Director of the Department for Foreign Affairs, Imperial Privy Councillor, Dr. Johann Kriege, have agreed to regulate the financial obligations between Russia and Germany arising from the Russian-German Supplementary Treaty, the reciprocal return of bank deposits and bank balances due, as well as the adjustment of certain differences in the economic systems of the two countries, and for these purposes to conclude a supplementary agreement to the Russian-German Supplementary Treaty, taking into consideration the Russian regulations in regard to the annulment of Russian State Loans and State Guarantees, and the nationalization of certain property values in Russia.
The plenipotentiaries, after exchanging their credentials, which were found to be in correct and proper form, came to an agreement in regard to the following provisions:
CHAPTER I. - THE FINANCIAL OBLIGATIONS OF RUSSIA AND GERMANY ARISING FROM THE RUSSIAN-GERMAN SUPPLEMENTARY TREATY TO THE PEACE TREATY.
The following provisions of the Russian-German Supplementary Treaty to the Peace Treaty concluded between Russia for the one part and Germany, Austria-Hungary, Bulgaria and Turkey for the other, are annulled: Article 2, article 8, in so far as it relates to payments by Russia on State obligations, including the State guaranteed loans; No.1;
paragraph 2, article 9, in so far as it does not relate to exemption from payment of taxes; clause 2, No.3, article 9; subclause 1, clause 2, paragraph 2, article 12; articles 13 to 15; paragraph 1, article 16; paragraph 2, article 16, in so far as it relates to Russian expropriations effected before July 1, 1918; and No.3, article 17, and No.4, paragraph 2, article 17.
Russia shall pay Germany six billion marks as compensation for losses sustained by Germans through Russian measures; at the same time corresponding claims on Russia's part are taken into account, and the value of supplies confiscated in Russia by German military forces after the conclusion of peace is taken into account.
The payment of six billion marks mentioned in article 2, shall be effected in the following manner:
The sum of one and a half billion shall be paid by the transfer of 245,564 kilograms of gold and 545,440,000 Rs., in bank notes consisting of 363,628,000 Rs. in bank notes of 50, 100, or 500 Rs., and 181,812,000 Rs. in bank notes of 250 or 1,000 Rs.
The transfer shall be effected by five installments namely, (1) a payment of 42,860 kilograms of fine gold and 90,900,000 Rs. in bank notes, consisting of 60,600,000 Rs, in bank notes of 50, 100, or 500 Rs., 30,300,000 Rs. in bank notes of 250 or 1,000 Rs.; this payment shall be made on September 10, 1918; (2) four payments which shall be made on September 20, October 31, November 30, and December 31, 1918, each amounting to 50,676 kilograms of fine gold and 113,635,000 Rs. in bank notes consisting of 75,757,000 Rs. in bank notes of 50, 100, or 500 Rs. and 37,878,000 Rs. in bank notes of 250 or 1,000 Rs.
Each payment shall be delivered to the representatives of the German Government at Pskov or at Orsha; on receipt of the money the representatives shall issue a temporary receipt which shall be replaced by a final discharge after the gold and bank notes have been checked and counted.
The sum of one billion marks shall be canceled by the delivery of Russian commodities on the basis of a special agreement, which shall be concluded in this connection. Before November 15 and December 31, commodities are to be delivered to the value of 50 million marks each time; before March 31, June 30, and December 31, 1919, commodities are to be delivered each time to the value of 150 million marks; before March 31, 1920, commodities to the value of 300 million marks; in so far as the deliveries cannot be effected within these periods the amount lacking in each individual case shall be immediately made up either by payment in German Imperial bank notes at their face value or in fine gold and bank notes in rubles in the proportion of 3 to 2 and at a rate which must be separately fixed in each case.
The sum of two and a half billion marks shall be paid by December 31, 1918, through the transfer of securities of a loan at 6 per cent from January 1, 1919, with a sinking-fund of ½ per cent, and this loan is issued by the Russian Government in Germany at the nominal amount of the above mentioned sum, and the terms of the loan shall be considered an essential part of this agreement.
Certain State revenues, and in particular the rental dues for certain economic concessions which will be granted to Germans, shall serve as guarantees of the loan mentioned in paragraph 1; guarantees shall be settled severally by the establishment of a special agreement in such a form that the estimated yearly income from them shall exceed the yearly sum required for interest and sinking-fund by at least 20 per cent.
With regard to the balance of one billion marks, in so far as its payment, with the consent of Germany, will not be taken over by the Ukraine or Finland in their agreement with Russia regarding the distribution of property, the parties reserve the right to enter on a special agreement.
Property of Germans situated in Russia, which was expropriated before July 1, 1918, to the use of the State or local self-government bodies, or the owner of which was in any other way deprived of the right to dispose of it, shall be returned on demand to the owner, subject to the return of the compensation received by him from the sum named in Article 2, with due regard to possible improvements or damage if the property has not remained in the possession of the State or local self-government bodies, or if expropriation or any other form of confiscation of similar property has not been effected, or is annulled, in regard to the local inhabitants or citizens of a third Power; demands for the return of property must be made within a year from the period when it can be claimed.
The provisions of article 8 of the Supplementary Treaty to the Peace Treaty remain in full force, in so far as they do not relate to payment on the Russian State debt, as do the provisions of paragraph 2, article 16, in so far as they relate to Russian expropriations after July 1, 1918, and the provisions of clause 2, paragraph 1, article 19, and of clause 1, article 22, and those of articles 28 to 32.
With regard to payment and guarantee of the financial obligations arising from these provisions, the parties reserve the right to conclude a further agreement, in so far as this has not already been regulated in Chapter III of the present agreement.
The contracting parties will supply each other with all possible information for the establishment of the civil damages sustained by the citizens of one party on territory over which the authority of the other party extends, and will likewise satisfy demands for the production of proofs relating to such damages.
CHAPTER II. - SURRENDER OF BANK DEPOSITS AND BANK CREDITS.
Each contracting party shall take care that the property values (bank deposits) of citizens of the other party, which are lodged on its territory with banking or financial institutions, including the moneys and certificates deposited for them with a central institution for the safe-keeping of valuables, or with an officially recognized trustee of valuables or in some other deposit institution which is recognized by the Government, be made over on demand of the authorized persons, with the right to despatch them to their native countries exempt from State taxes and duties.
Each party shall regard the bank deposits of citizens of the other party within its territory, as the deposits of the citizens of the other party as interpreted by paragraph 1, if these deposits have been made in the name of such citizens. In other cases a special proof is required showing that the deposits are those of citizens of the other party; possible disputes in this connection shall be decided by a commission consisting of a representative from each of the two Governments and a neutral chairman.
Commissions provided for in paragraph 2 shall be set up at Moscow, Petrograd, and Berlin immediately after the coming into force of this agreement; the chairman shall be appointed, with the consent of the Royal Swedish Government by the Swedish consuls in these places.
Each contracting party shall take care that the banking and financial institutions within its territory, immediately after the coming into force of this agreement, without any reference to the extension of time provided for in clause 1, paragraph 1, No. 3, of article 7 of the Supplementary Treaty to the Peace Treaty, shall payout the sums demanded by the rightful possessors, for which payment is due and which belong to the citizens of the other party. The rightful owner may also despatch the sums obtained by him to the territory of his native State, exempt from State taxes and duties.
In regard to bank credits, mentioned in paragraph 1 of this article, the provisions of paragraphs 2 and 3 of article 7 apply.
In order to hasten the delivery of bank deposits and credits as provided by articles 7 and 8, each contracting party shall immediately appoint a State commissary to whom their respective citizens hand in their claims before January 31, 1919. The two commissaries shall communicate these claims to one another not later than September 25, 1918, for the first time, than November 15, 1918, for the second time, and not later than February 15, 1919, for the third time, and see that the bank deposits and credits to be delivered on this basis shall be transferred on October 25, 1918, December 31, 1918, and March 31, 1919, and immediately after the decision of the commission, in so far as these claims have been verified under paragraph 2, article 7, and paragraph 2, article 8, by the Mixed Commission. The transfer shall take place in Moscow on the side of Russia and in Berlin on the side of Germany.
Each contracting party takes care that the delivery, in so far as the rights of banks or of third persons to these deposits or credits are not in conflict, shall take place against an authenticated release of the person in whose name the deposit or credit stood, or who is recognized as authorized by the Commission referred to in paragraph 2, article 7. Should another person claim the deposit or credit on the ground of inheritance or legal succession to the entire property of a juridical person, the release can be presented by this other person, if he belongs to the same contracting party as the original claimant and if his right is attested by a statement of the State commissary of this party.
In all other cases the right must be specially proved to the banking or financial institution where the deposit or credit rests.
Persons wishing to present their claims without the mediation of the State commissary, may apply direct to the banking or financial institutions, in the case of German citizens, only after October 25, 1918, and in the case of Russian citizens only after December 31, 1918.
The provisions of articles 7 and 8 find corresponding application to the bank deposits and credits in Russia of citizens of Courland, Livonia, Esthonia, and Lithuania, in particular to the moneys, certificates and other valuables abstracted in these provinces during the war, as also to the bank deposits and credits in these provinces of Russian citizens, including deposits in the State Bank as successor in title to all nationalized Russian private banks.
CHAPTER IlI - THE ADJUSTMENT OF CERTAIN DIFFERENCES IN THE ECONOMIC SYSTEMS OF BOTH COUNTRIES.
Property of Germans in Russia shall in future be expropriated or its owner otherwise deprived of the right to dispose of it, only if the expropriation or other form of withdrawal is made in favor of the State or of local self-government bodies under legislation which applies to all the inhabitants of the country and to the citizens of a third country, and to all property of a similar nature, and further if the owner immediately receives compensation in cash.
The amount of the compensation to be paid, in accordance with paragraph 1, shall be determined by two experts, of whom one shall be appointed by the Russian Government, and the other by the rightful claimant; should these persons not come to an agreement, they shall invite a third expert as chairman, who shall be appointed by the Swedish Consul, if no other arrangement has been made.
Property which has been expropriated in accordance with Article II, or whose owner has been deprived of the right to dispose of it, shall be returned to the owner on his demand, against the return of the money paid him in compensation, and with regard being had to possible improvement or damage, in all cases where the property does not remain in the public possession of the State or of local self-government bodies, or if the expropriation or other form of withdrawal of similar property is annulled as regards the inhabitants of the country, or the citizens of a third country; the demand for return of the property must be made within a year of the time it can be claimed.
Tho provisions of paragraph 2, article 11, and of article 12, find corresponding application in so far as property of Germans in Russia has been expropriated or its owner deprived of the right to dispose of it, after July 1, 1918, and before the coming into force of this agreement.
Demands for return in cases mentioned in paragraph 1, can be made when an expropriation or any other form of withdrawal of similar property has not been carried out in regard to inhabitants of the country, or citizens of a third country; such demands must be made within one year after the coming into force of this agreement.
German creditors may demand satisfaction in respect to their claims arising before July 1, 1918, and immediately after these have fallen due, from the balances of their debtors in Russian banks, if their claims are recognized as valid by both the debtor and the bank. In case there is no acknowledgment on the part of the debtor, a court decision having the force of law may be substituted; if the validity of the claim is disputed by the bank, the matter is decided by the commissions in Petrograd and Moscow, referred to in paragraph 3, article 7.
The Russian-German Convention of October 31 (November 12), 1874, regarding inheritances shall remain in force on condition that, in regard to all cases of inheritance which will arise after the new regulations of rights of inheritance in Russia, the provisions for movable property shall apply also to immovable property, and that the inheritance shall be taxed only by the native State of the deceased, and further that the Convention shall not be disclaimed during the whole period when the right of inheritance in Russia is abolished or essentially limited.
Further, the contracting parties reserve the right to supercede certain provisions of the Convention regarding inheritance, which have proved to be inapplicable in practice, by new provisions more suited to present conditions.
CHAPTER IV. - CONCLUDING PROVISIONS.
This Agreement shall be ratified and exchange of ratification documents shall take place in Berlin by September 6, 1918.
This Agreement comes into force on the day of the exchange of ratification documents.
In witness whereof the plenipotentiaries have signed and sealed this Agreement.
Executed in duplicate in Berlin, August 27,1918.