Legal > Powers and duties attributed to the League of Nations by international treaties

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The general position as regards each of the loans may be briefly
outlined as follows:
Austria: Protocols, II and IIP of 4 October, 1922. (Hudson II,
p. 884; 12 Treaty Series p. 291).
Although the loan raised under these instruments was redeemed
in 1934, the League still has one sole remaining function, that of
appointing the loan trustees. This is due to the fact that certain
holders of the bonds of the United States issue, which was payable
in dollars, refused payment in depreciated dollars and sought to
obtain payment in gold by litigation against the trustees. The
latter accordingly did not close their accounts but continued to
hold part of the reserve fund of the loan in the Bank of England
to meet the claims, if they should be proved to be valid.
Austria: Protocol of 15 July, 1932. (Hudson VI, p. 84; 135 Treaty
Series p. 285).
This was an agreement between Austria of the one part and
Belgium, Great Britain, France, Italy and the Netherlands of the
other part, embodying a scheme which had been worked out by the
League’s Financial Committee in response to a second request for
assistance presented by Austria in September 1931. The states of
the second part each guaranteed or contributed a specified portion
of the loan. Powers in connection with the utilisation of the loan
and with the execution of the stipulated reforms were conferred
on a Representative of the League of Nations and an Adviser to
the National Bank of Austria to be appointed by the League.
These posts were abolished by the Council as from 1 November,
1936 (League of Nations Official Journal, 1936, p. 1171), but in
accordance with the agreement reached with the Austrian Govern¬
ment at that date, (1) The Secretary-General appointed an officer
to carry out the duties foreseen in Article 10 of Annex 3 of the
Protocol of 1932 (following the financial and economic develop¬
ments in Austria) and (2) the Council retamed the right, provided
the funds borrowed either by virtue of the protocol or through the
Loan of 1923 were not entirely repaid, to reappoint a representative
of the League of Nations or the Bank Adviser, or both, at its dis¬
cretion. Provision was to be made by the protocol and the general
bond to cause the “system of pledged assets” by which the existing
Austrian League loan was secured to apply to the new loan, in the
form in which it was in force in 1932, subject to established priori-
i protocol I is purely political and relates to the maintenance of the independ¬
ence of Austria.