Lot Essay
RUSSIAN EXCHANGE REHABILITATION AGREEMENT OF OCTOBER 1915
(Extract from internal minute)
Under the Agreement certain Russian banks were authorised to draw bills on various London Houses up to a total of #10mn for the purpose of supporting the Russian Exchange. It was arranged that in the event of the acceptors not being put in funds by the drawing banks, the Banque de L'Etat would provide the necessary cover and, as a futher safeguard, Russian Government Treasury Bills for the amount of the credit were lodged at the Bank of England.
In December 1917 remittances from Russia to meet the maturing bills ceased to arrive. It was agreed that the acceptors should pay the bills at maturity and surrender them to the Bank in exchange for a like amount of 3 Exchequer Bonds 1930. Bills for #7,260,000 were handed to the Bank for exchange under this arrangement.
The matter then seems to have rested until September 1932, when a Liquidation Order was taken out against the Moscow Merchant's Bank and claim for the amount owing (#287,500) was lodged with the liquidator.
Subsequently, similar action was taken against the Russian Commercial and Industrial Bank, the Russo-Asiatic Bank and the Russian Bank for Foreign Trade, which were then in course of liquidation, and the Chief Cashier was authorised to make proof of debt in each case.
The results of the Court proceedings are difficult for the layman to follow. Suffice to say that the Treasury expected to receive a mere #87:10: - in respect of their claim on the Russian Bank for Foreign Trade and it was against possible receipt of this amount that the Bank of England were asked, in 1938, to continue to hold the bills "until further notice". Although strictly speaking this direction applied only to bills drawn by the Russian Bank for Foreign Trade, there was an implied obligation that we should continue to hold all the bills in our possession.
(Extract from internal minute)
Under the Agreement certain Russian banks were authorised to draw bills on various London Houses up to a total of #10mn for the purpose of supporting the Russian Exchange. It was arranged that in the event of the acceptors not being put in funds by the drawing banks, the Banque de L'Etat would provide the necessary cover and, as a futher safeguard, Russian Government Treasury Bills for the amount of the credit were lodged at the Bank of England.
In December 1917 remittances from Russia to meet the maturing bills ceased to arrive. It was agreed that the acceptors should pay the bills at maturity and surrender them to the Bank in exchange for a like amount of 3 Exchequer Bonds 1930. Bills for #7,260,000 were handed to the Bank for exchange under this arrangement.
The matter then seems to have rested until September 1932, when a Liquidation Order was taken out against the Moscow Merchant's Bank and claim for the amount owing (#287,500) was lodged with the liquidator.
Subsequently, similar action was taken against the Russian Commercial and Industrial Bank, the Russo-Asiatic Bank and the Russian Bank for Foreign Trade, which were then in course of liquidation, and the Chief Cashier was authorised to make proof of debt in each case.
The results of the Court proceedings are difficult for the layman to follow. Suffice to say that the Treasury expected to receive a mere #87:10: - in respect of their claim on the Russian Bank for Foreign Trade and it was against possible receipt of this amount that the Bank of England were asked, in 1938, to continue to hold the bills "until further notice". Although strictly speaking this direction applied only to bills drawn by the Russian Bank for Foreign Trade, there was an implied obligation that we should continue to hold all the bills in our possession.