AGREEMENT No. III
CONCERNING THE ORGANISATION AND WORKING OF AN AGRARIAN
FUND ENTITLED "FUND A".
CREATION AND WORKING OF THE AGRARIAN FUND.
By an Agreement of even date with the Hungarian Government provision has been made for the constitution of a fund entitled "The Agrarian Fund instituted by The Hague Agreements of 20th January 1930", and, for short, "Agrarian Fund", or "Fund A". The object of the present Agreement is to define the conditions for the constitution and working of this Fund.
Article 1.
The capital of the Fund amounts to 219,500,000 gold crowns (a gold crown is equivalent to .304878 of a gramme of fine gold).
The figure of 219,500,000 gold crowns has been arrived at on the basis of the figures indicated in the Hungarian Delegations memorandum submitted to The Hague Conference (Second Commission: Non-German Reparations) which is appended (Annex A). At that time Hungary presented total claims amounting to 310,000,000 gold crowns which were reduced to 240,000,000 gold crowns.
The basis figures adopted in the said memorandum for the average value of the cadastral jugar in each country must therefore be reduced in the proportion of 310 to 240.
Subsequently, as a result of fresh enquiries and changes in the areas specified in Articles 11 to 19 of the present Agreement which refer to the agrarian reform in Czechoslovakia, where the said reform is in process of execution, the capital of the Fund has been reduced to 219,500,000 gold crowns as a result of the reductions in the areas, under consideration, the same reduced basic figures for the value of the jugar being retained.
Article 2.
Over and above the payments hereinafter prescribed, to be made by Czechoslovakia, Jugoslavia and Roumania on account of local indemnities, the following annuities shall be at the disposal of the Fund:
1. As from 1st July 1930 until 1943 inclusive, the annuities paid by Hungary in respect of reparation, constituting the share of Belgium, the British Empire, France, Italy, Japan and Portugal in accordance with the Arrangement of 20th January 1930 between the Creditor Powers.
2. During each of the 23 years from 1944 to 1966 inclusive 6,100,000 (six million one hundred thousand) gold crowns per annum transferred by the Creditor States from the sum of 13,500,000 gold crowns which Hungary has undertaken to pay during 23 years as from 1944, in respect of special claims.
3. As from 1st April 1930 and until 1st April 1966, certain annuities payable in equal instalments on 1st October and 1st April of each year, the first instalment falling due on 1st October 1930 and the last on 1st April 1966. These annuities shall be paid by Belgium, the British Empire, France and Italy, and shall be equal to the sums actually received by the said Powers in respect of Bulgarian reparation, in accordance with the Arrangement of 20th January 1930 between the Creditor Powers.
4. Annuities paid by the British Empire, France and Italy which shall not exceed the maximum amounts specified below:
(a) 1931 and 1932 (or until 1st January 1933) 800,000 gold crowns per annum, of which 400,000 are to be paid by France and 400,000 by Italy.
(b) from 1933 to 1st January 1944 (3,600,000 g. crowns + 325,640 + 212,000) or 4,137,640 gold crowns, of which
827,528 are to be paid by the British Empire
1,680,000 are to be paid by France
1,630,112 are to be paid by Italy.
(c) from 1944 to 1st January 1967 (2,280,000 gold crowns + 544,690 + 354,606) or 3,179,296 gold crowns, of which
579,269 are to be paid by the British Empire
1,340,000 are to be paid by France 1,260,027 are to be paid by Italy.
These annuities shall be payable in two equal instalments on 1st July and 1st January of each year, the first instalment of the annuities referred to under (a) above falling due on 1st July 1931, of those under (b) on 1st July 1933, and of those under (c) on 1st July 1944, the last instalment in the case of the latter falling due on 1st January 1967.
In the event of the utilisation of the special reserve referred to in Article 20 of the present Agreement, the resources provided for in the said Article shall also be at the disposal of the Fund in addition to the payments mentioned above.
It is understood that the three Powers (British Empire, France, Italy) shall in no case be called upon to make payments in excess of those indicated above, save in respect of the provisions of Article 20 of the present Agreement in so far as concerns the intervention by France and Italy in the constitution of the special reserve and subject to the provisions of Article 12.
Article 3.
The Agrarian Fund shall issue bonds for a nominal capital equal to the definitive total of the Fund, which shall be fixed with due regard to the reductions provided for in the present Agreement as well as to the increase which may result from the expropriations referred to in Articles 17 and 18 of the present Agreement.
All the bonds issued by the Fund shall be of the same type and, in particular, shall have the same guarantees. They shall be expressed in the currencies of various countries on the basis of the gold crown, if the Managing Commission so decides.
The calculations for the issue of these bonds have been made in gold crowns on the basis of an interest service of 4% as from 1933 until 1966, redemption of the securities being effected as from 1944 in such a manner that the total annuity for interest and sinking fund shall be the same for each year from 1944 to 1966.
Article 4.
The Fund shall be organised, managed and represented by a Commission composed of four members, one of whom shall be appointed by the Hungarian Government, and three by the Finance Committee of the League of Nations, or any other organisation selected by the three Powers, France, Great Britain and Italy.
Article 5.
The Managing Commission shall see that the payments provided for in the present Agreement are made regularly and shall notify any delay in the payments to the Powers signatory to the present Agreement, which, in case of need, shall consult together with a view to removing any casue of delay.
Article 6.
The Managing Commission is authorised to accept offers of redemption or discount relating to the whole or a portion of any annuities due to it.
Article 7.
Should the cash at its disposal render this possible, the Managing Commission may by way of compromise make payments in cash in return for the cancellation of the bonds issued by the Fund and may also make advances on the bonds. It shall also be entitled to redeem the bonds by purchase on the open market.
Article 8.
The Managing Commission shall make every effort to render possible the direct or indirect mobilisation of the bonds issued by the Fund to the largest extent and under the best conditions possible. As the issue and mobilisation of the bonds can only take place after a certain lapse of time, the Managing Commission shall, if it thinks fit, appoint a Financial Committee, which shall consider when and under what conditions mobilisation operations can take place, and shall make proposals on this point to the Managing Commission. The members of the Financial Committee shall be chosen from the nationals of countries having an important financial market, including Hungary. The Managing Commission shall not be entitled to mobilise securities if the Hungarian member of the Commission demande the adjournment of the operation.
The Managing Commission shall be entitled to request the Bank for International Settlements to act as Trustee for the Fund. Should the Bank comply with this request, the States contributing to the Fund shall give a permanent order to the said Bank to transfer periodically, as they fall due, the sums to be paid by each State under the provisions of the present Agreement, from the account of the State to the Account of the Fund.
In order to ensure the more favourable conditions for placing the securities, the Managing Commission shall in due course approach the Governments of States having an important financial market, with a view to obtaining, if possible, the necessary facilities for the securities.
It shall also endeavour to obtain all the fiscal facilities which the State in whose territory the Fund has its domicile can grant.
The domicile of the Fund shall be chosen by the Managing Commission.
The costs of legal proceedings, of the working, and, in general, all the costs of the management of the Fund, are to be met by the Fund. For this purpose provision has been made in the calculations that a sum of four million eight hundred thousand crowns should be set aside from the first payments received by the Agrarian Fund to assist it in supporting these expenses.
Article 9.
As regards the application of the agrarian reform in Roumania to present and future Hungarian claimants, as stated in Article 1 of Agreement No. II, Roumania is under no obligation other than to pay to the Fund her local indemnity fixed so as to cover her total liabilities on a lump sum basis at the following amounts:
a) Roumania agrees to pay each year to the Agrarian Fund as from 1931 an annuity of 500,000 gold crowns until 1st January 1944 inclusive, payable in equal instalments on 1st July and 1st January of each year and, as from 1944 until 1st January 1967 inclusive, an annuity of 836,336 (eight hundred and thirty-six thousand three hundred and thirty-six) gold crowns, payable in the same manner;
b) The Roumanian Government recovers the right of disposing freely of the local indemnities which it had set aside in favour of the Hungarian claimants;
c) Certain Hungarian claimants having already taken over Roumanian local indemnities, the annuities determined above will consequently have to be reduced.
For this purpose, the nominal amount of the Roumanian local indemnity thus accepted in payment shall be established and shall be converted into gold crowns on the basis of monetary parity.
For the period from 1931 to 1st January 1944 inclusive, the annuity shall be reduced by four per cent (4%) of this total, and for the period from 1st July 1944 to 1st January 1967 inclusive, by six decimal sixtynine per cent (6.69%) of this total.
The said annual payments shall be reduced under the same conditions in respect of the Roumanian local indemnities corresponding to the lands of Hungarian claimants whose claims are rejected by the Mixed Arbitral Tribunal either for want of jurisdiction or because they are out of time or for any other reason. Nevertheless this reduction shall not be made if the Tribunal finds that the claimant is of Roumanian nationality.
When Roumania makes this reduction, she shall submit to the Managing Commission proof that she has handed over the local indemnities, and in regard to claimants whose claim has been rejected by the Mixed Arbitral Tribunal, she shall communicate the decisions of the Roumanian authorities fixing the local indemnity.
It is understood that, so far as Roumania is concerned, the agreement represents a lump sum settlement, whatever may be the extent of the lands forming the subject of the legal proceedings referred to in Article I of Agreement No. II of even date.
Article 10.
In full discharge of her obligations to the Agrarian Fund, Jugoslavia shall pay to the said Fund each year as from 1931 until 1st January 1944 inclusive, an annuity of 1,000,000 gold crowns payable in two equal instalments on 1st July and 1st January of each year, and, i. e. as from 1944 until 1st January 1967 inclusive an annuity of 1,672,672 (one million six hundred and seventy-two thousand six hundred and seventy-two) gold crowns, payable under the same conditions.
This figure represents a lump sum settlement of the total indemnities which may be allotted by the Jugoslav law now in preparation for the expropriated lands of present and future claimants within the terms of Article I of Agreement No. II of even date.
The capital of the Agrarian Fund shall be reduced by 387 gold crowns per cadastral jugar left to the owners since the beginning of the agrarian reform, in the case of properties forming the subject of the legal proceedings referred to in Article I of Agreement No. II of even date.
The same rule shall apply to the cadastral jugars belonging to owners who are actually claimants at the date of the signature of the present Agreements, in regard to whom the Mixed Arbitral Tribunal decides that it has no jurisdiction, or whose claim it dismisses.
This reduction in capital of the Fund shall have as counterpart:
1. Up to 30,000 cadastral jugars thus left to their owners or set free, a reduction in the annuity to be paid by Jugoslavia of 15.48 gold crowns per jugar up to 1st January 1944 inclusive and of 25.89 gold crowns from 1st July 1944 to 1st January 1967 inclusive.
2. For every jugar in excess of 30,000 cadastral jugars thus left to the owners or set free, a reduction in the annuity to be paid by Jugoslavia of 6.24 crowns up to 1st January 1944 inclusive and of 10.44 crowns from 1st July 1944 to 1st January 1967 inclusive, and the transfer of a sum of 231 gold crowns from Fund A to Fund B (Jugoslav Section).
Nevertheless, the figure of 387 gold crowns may be corrected by the Managing Commission to take account of the quality of the lands left to the owners. Jugoslavia shall then be entitled either to accept the Managing Commissions valuation, in which ease the above mentioned reductions shall be calculated on the basis of these prices thus modified, or to cancel the release of the lands left to the owners.
The detailed list of the lands released shall be notified by the Jugoslav Government to the Fund.
It is understood that so far as Jugoslavia is concerned, the agreement represents a lump sum settlement, whatever may be the extent of the lands forming the subject of the legal proceedings referred to in Article I of Agreement No. II of even date.
Article 11.
In regard to Czechoslovakia as the agrarian reform is at present in process of execution, the figures have been reexamined.
Any settlement made by agreement in Czechoslovakia with a Hungarian national in respect to the application of the agrarian reform to his properties shall be respected on both sides.
By such settlements there have been terminated agrarian law suits brought by a certain number of Hungarian nationals, who, prior to 20th January 1930, abandoned proceedings instituted by them before the Mixed Arbitral Tribunal relating to a total area of about 275,000 cadastral jugars (entitled first category) according to the list exchanged between the Governments concerned.
Article 12.
Apart from this area, the area of lands on which expropriation is in progress and which have led to legal proceedings before 20th January 1930, amounts to
about 586,000 jugars (entitled second category).
Czechoslovakia states that of this total, properties of an area of about 145,000 cadastral jugars, the subject of a lawsuit before the Mixed Arbitral Tribunal under No. 821, have given rise to a direct agreement at present contested by the former owner.
This lawsuit will be carried on against the Agrarian Fund, as provided for in the case of the lawsuits referred to in Article I of Agreement No. II. The conditions under which the posible risk is to be covered are settled by a special Agreement of even date between the Governments concerned.
Further, Czechoslovakia has explained that she had completely settled by friendly arrangement disputes Nos. 62 and 74 relating to a total area of about 90,000 jugars, and that she has obtained the abandonment of the suit initiated.
In these circumstances, the legal proceedings in progress, which fall within the second category, now apply only to properties of a total area of about 351,000 jugars.
Article 13.
Of this total of about 351,000 cadastral jugars, the Czechoslovak Government, in application of its agrarian law, has released or will release to the benefit of the owners at present claimants, a minimum of 100,000 cadastral jugars.
It is specified that in the calculation of this area, where properties are held in joint ownership, only the proportion to which the claimant is entitled is counted.
When an owner has been authorised to sell his property, the portion of his land which was to be released will count towards the 100,000 jugars to be released.
When, however, an owner is obliged by the Czechoslovak authorities to sell lands to third persons, these lands shall not count towards the 100,000 jugars, such sales being considered as aquivalent to expropriation.
Areas of land which the Czechoslovak authorities have offered to release to a claimant count, if, by way of exception, the said claimant abandons them of his own free will.
Similarly, in any case in which the Mixed Arbitral Tribunal establishes that the claimant in question is not a qualified Hungarian national, or where it decides that there is no jurisdiction or dismisses the claims or again where the claimant abandons the proceedings, the lands released must be included in the calculation of the 100,000 cadastral jugars.
Article 14.
Czechoslovakia has paid, or will pay directly to the owners who are claimants, the indemnities due by vitrue of the local legislation. The use of these indemnities in discharge of the debts and public liabilities due by the owner, according to local legislation, shall be considered as a direct payment.
The sums paid to these entitled shall be considered as paid to the Agrarian Fund and shall, for each person entitled, go to reduce the sums which the Fund would have to pay to him.
If an owner does not accept the payment, the sums shall be paid directly to the Fund.
Article 15.
In regard to Czechoslovakia, it is understood that the capital of the Fund shall be reduced as indicated below:
1. In the case of each cadastral jugar released in excess to the figure of 100,000 cadastral jugars fixed in Article 13 above, the capital of the Fund shall be reduced by 226 gold crowns per jugar thus released in excess;
2. in the case of properties (second category) in regard to which legal proceedings cease as a result of a settlement or because they are abandoned, or in which the Tribunal declares that it has no jurisdiction, or dismisses the claim, the capital of the Fund shall be reduced by 226 gold crowns per jugar not released.
When the capital of the Fund is thus reduced, the difference between the average price of 226 gold crowns and the average indemnity, calculated for the purpose of the present Article at 100 gold crowns per cadastral jugar, shall be transferred from Fund A to Fund B (Czechoslovak Section).
Nevertheless, this figure of 226 gold crowns may be corrected by the Managing Commission of the Fund to take account of the quality of the lands released.
Article 16.
Particulars of the lands released within the meaning of the preceding Articles shall be notified to the Fund by the Czechoslovak Government together with the total of the sums assigned to the owners in application of the agrarian legislation. The notification shall mention the sums deducted under the heading of public liabilities and debts paid, according to local legislation, all these amounts having been paid on account of the owner.
Article 17.
A detailed examination of the properties forming the subject of the agrarian reform in Czechoslovakia has shown that the Government of that country, in continuing to apply the agrarian reform, is about to proceed to a certain number of expropriations of lands belonging to owners who state that they are of Hungarian nationality or who are presumed to be so. A list exchanged between the Governments concerned contains the names of these 146 owners.
The Czechoslovak Government, while entering reservations as to the nationality of these possible claimants (entitled the 3rd category) has stated that in the case of a large number of the lands belonging to these owners there had been a final settlement or that their claims were out of time. In regard to the rest of these lands, it has also stated that in continuing the application of the agrarian reform to this category, it would not retain more than a total area not exceeding 25,000 jugars.
Article 18.
Among all the owners affected by the agrarian legislation who do not fall within one of the three categories referred to above, there may, contrary to expectation, be certain owners not at present considered as Hungarian nationals who might claim such nationality (4th category).
The Czechoslovak Government has stated that the area of land which it might thus retain, apart from cases in which there has been a final settlement or those where the claims were out of time, would not exceed a total of 25,000 jugars.
Article 19.
The Czechoslovak Government shall take the necessary steps to have the notifications provided for in Article 15 of Agreement II of even date made to the owners before 30th June 1932.
Article 20.
In order to achieve the appeasement which all desire, the two Powers, France and Italy, have agreed to intervene financially by means of a total annuity not exceeding 326,000 gold crowns from 1933 to 1943 inclusive and 545,291 gold crowns from 1944 to 1966 inclusive which, with the indemnities paid by Czechoslovakia according to the local legislation for expropriated lands referred to in Articles 17 and 18 above, will constitute a special section of the Agrarian Fund to be entitled "Special Reserve".
Its object is to enable the Agrarian Fund to meet obligations resulting from lawsuits corresponding to the 3rd and 4th categories mentioned in Articles 17 and 18 above.
The conditions for the employment of this annuity have formed the subject of an agreement between the two Powers, France and Italy, and Hungary, which agreement provides, in particular, that any savings on this special reserve shall not be paid to Fund B, but shall go to reduce the annuity fixed above.
In the conditions of the present Agreement and as a result of the formation of this special reserve and of Articles 11 to 19 above, no valid claim by Hungarian nationals regarding the application of the agrarian legislation in Czechoslovakia can be made except against the Agrarian Fund, the Czechoslovak Government being freed from all responsibility.
Article 21.
The transfers from Fund A to Fund B referred to in Articles 10 and 15 shall be made not in capital but by means of the transfer of the corresponding annuities.
Article 22.
In the event of any difference as to the interpretation or application of the present Agreement, and failing agreement between the parties interested on the choice of a single arbitrator, any State interested shall be entitled to address itself, by written application, to the Permanent Court of International Justice.
Done at Paris in a single copy, the 28th day of April 1930.
LOUCHEUR
For Mr. BENEŠ: IBL
ROBERT PERIER
W. A. C. GOODCHILD
W. A. C. GOODCHILD
W. A. C. GOODCHILD
W. A. C. GOODCHILD
W. A. C. GOODCHILD
PHILIPPE ROY
D. CAVADIAS KORANYI
IGINO BROCCHI
J. MROZOWSKI
TOMAZ FERNANDES
M. SPALAIKOVITCH
N. TITULESCU.
Annex A to Agreement No. III.
MEMORANDUM BY THE HUNGARIAN DELEGATION SUBMITTED AT
THE HAGUE CONFERENCE
(Second Commission: Non-German Reparations).
The Hungarian Delegation desires to facilitate in the manner herein set forth, the task of calculating the necessary sum for the maximum limit of the liabilities of the "Special Fund".
With this end in view, the Hungarian Delegation thinks that it may indicate the figures mentioned below. In so far as Roumania is concerned, these figures are exact, the date on the basis of which they were calculated having been the result of a long and thorough study, undertaken conjointly by the Hungarian and Roumanian Delegations during the negotiations that were opened in order to secure an amicable agreement. In the case of Jugoslavia, they are less exact, since the number of jugars expropriated is known only through the claims that have been laid before the Mixed Arbitral Tribunal. It may, however, be assumed, judging by the Jugoslav regulations on agrarian reform, and judging also by the definite facts that are known, that the properties in question were expropriated almost in their entirety. The least exact figures are those relating to Czechoslovakia, since the agrarian reform laws of this State in no case require complete expropriation of the real property, but allow of the retention by their former owners of areas of varying extent, these areas having not yet been definitely fixed in the individual cases.
Roumania. In the case of the law suits of the Hungarian nationals, in regard to which the above mentioned negotiations took place, it was ascertained, by means of conversations and exchange of documents that 578,556 cadastral jugars have been expropriated and that 50,259 cadastral jugars have been left to the owners in question. The Hungarian Government would be prepared to accept, as a final indemnity for the 578,556 cadastral jugars expropriated, the very small sum of 130 million gold crowns, in which no account is taken of the actual value nor of the loss of enjoyment over a period of almost ten years-the same sum that, inspired by a conciliatory spirit, it was prepared to accept in the above mentioned negotiations. This represents 225 gold crowns per cadastral jugar. This sum, as also all those that follow, are to be understood, of course, as present values.
Jugoslavia. The law suits now in course relate to approximately 150,000 expropriated cadastral jugars. The Hungarian Delegation believes that 80 million gold crowns would be enough to induce the Hungarian nationals to withdraw their claims, and that this amount might also be fixed as the limit for the liabilities for the "Special Fund". This sum represents an indemnity of approximately 500 gold crowns per jugar. It does not cover either actual damages nor the loss of enjoyment, which the claimants are prepared to leave out of acount. Since the lands in question are very good, the estimate of 500 gold crowns remains far below their real value.
Czechoslovakia. The claims relate to approximately 500,000 cadastral jugars. In mentioning these areas, however, it must be explained that they include, not only parcels of land already expropriated, but also parcels that are still threatened by possible expropriation in accordance with the law, and which in any case may not be disposed of, this prohibition affecting practically the entire property. Giving very approximative figures, between 50 and 5% of the total area has already been expropriated. Assuming that the remaining 50 to 25% will not be expropriated, but may be retained in kind by its owners, an arrangement which in view of the general practice in the matter of expropriation may be hoped for and which would be quite possible under Czechoslovak law, 100 million gold crowns would be approximately enough to indemnify - on a low scale - the Hungarian claimants for the lands that have already been expropriated. Such an indemnity would represent approximately an indemnity of 2,000 Czechoslovak crowns per cadastral jugar, an assessment that is fairly frequent in the course of the application of the agrarian reform law itself, the amount in this latter case being approximately 292 gold crowns per cadastral jugar. In this sum also, no account is taken of the actual damages, which were not very great in Czechoslovakia, nor of the loss of enjoyment, the duration of which is now longer, nor of the tax upon capital (in so far as it is already definitively paid), which is very heavy. It is, however, a reduced indemnity. It is a larger one than the 225 gold crowns which Roumania accepted, this slight difference being due to the fact that, on the average, the lands in Czechoslovakia, although not so good as those in Jugoslavia, are better than those in Transylvania.
The indemnities that have actually been paid in accordance with the local law, for the expropriated parcels of land, must, of course, be subtracted from the amounts of the indemnities given above.
RIDER TO THE AGREEMENTS SIGNED THIS DAY.
The Representatives of the Government of His Majesty the King of the Belgians, the Government of the United Kingdom of Great Britain and Northern Ireland, the Government of Canada, the Government of the Commonwealth of Australia, the Government of New Zealand, the Government of the Union of South Africa, the Government of India, the Government of the French Republic, the Government of the Greek Republic, the Government of His Majesty the King of Italy, the Government of His Majesty the Emperor of Japan, the Government of the Republic of Poland, the Government of the Republic of Portugal, the Government of His Majesty the King of Roumania, the Government of the Czechoslovak Republic, the Government of His Majesty the King of Jugoslavia,
have agreed as follows:
SOLE ARTICLE.
The 13,500,000 gold crowns to be paid by Hungary from 1st January 1944 up to the end of 1966 shall be distributed as follows:
1. 6,100,000 gold crowns to the Agrarian Fund as provided for in Article II of Agreement III signed this day,
2. 7,400,000 gold crowns to Fund "B" as provided for in Article IV of the Agreement IV signed this day.
Paris, the 28th April 1930.
LOUCHEUR
IGINO BROCCHI
For Mr. BENEŠ: IBL
W. A. C. GOODCHILD
W. A. C. GOODCHILD
W. A. C. GOODCHILD
W. A. C. GOODCHILD
W. A. C. GOODCHILD
PHILIPPE ROY
D. CAVADIAS
N. TITULESCU
J. MROZOWSKI
T. FERNANDES
ROBERT PERIER
M. SPALAIKOVITCH.