Economic and financial section > Report of the Committee for the Study of International Loan Contracts
(33)
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8. Even in such a case, it may be that internal legislation
might subsequently be applied to the loan contract just as,
during the past few years, a certain number of States have
prohibited the use of gold as a standard of value and repudiated
prior contracts, the obligations of which were so expressed. It
would not be possible entirely to prevent this risk, unless an
international code of law were accepted which would take this
matter outside the sphere of national law.
The Committee feels it desirable that, if there is a gold
clause, it should be expressed as above in the most unambiguous
terms. At the same time, it must repeat that it feels that a
gold clause may well be so rigid in the only circumstances in
which it would be called into application as to be likely in fact
to be ineffective, and it believes that a currency option clause
will in practice be a more effective protection. .
8. Even in such a case, it may be that internal legislation
might subsequently be applied to the loan contract just as,
during the past few years, a certain number of States have
prohibited the use of gold as a standard of value and repudiated
prior contracts, the obligations of which were so expressed. It
would not be possible entirely to prevent this risk, unless an
international code of law were accepted which would take this
matter outside the sphere of national law.
The Committee feels it desirable that, if there is a gold
clause, it should be expressed as above in the most unambiguous
terms. At the same time, it must repeat that it feels that a
gold clause may well be so rigid in the only circumstances in
which it would be called into application as to be likely in fact
to be ineffective, and it believes that a currency option clause
will in practice be a more effective protection. .
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| League of Nations > Economic and financial section > Report of the Committee for the Study of International Loan Contracts > (33) |
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| Permanent URL | https://digital.nls.uk/190547719 |
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| Shelfmark | LN.II.1/1.(7) |
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| Shelfmark | LN.II |
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| Description | Over 1,200 documents from the non-political organs of the League of Nations that dealt with health, disarmament, economic and financial matters for the duration of the League (1919-1945). Also online are statistical bulletins, essential facts, and an overview of the League by the first Secretary General, Sir Eric Drummond. These items are part of the Official Publications collection at the National Library of Scotland. |
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