Johnson Act
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The Johnson Act of 1934 (or Foreign Securities Act) prohibited nations in default from marketing their bond issues in the United States.
Senator Hiram Johnson sponsored, in 1934, the Act which included a passage that forbade loans to nations in default on their debts.
On May 5th, 1934, Attorney General Cummings rendered an opinion on the meaning of the terms "default" and "partial default" used in the Act. He held that Czechoslovakia, Italy, Latvia, Lithuania, Great Britain and Canada were not in default, despite the fact that all but Canada were in arrears on their debts, while Soviet Russia was in default.
The 1945 Bretton-Woods Agreements Act is regarded as a tacit repeal of the Johnson Act.
[edit] References
- Freidel, Frank. Franklin D. Roosevelt: A Rendezvous with Destiny. London: Little, Brown and Company, 1990.
- Borchard, Edwin. 1951. State Insolvency and Foreign Bondholders: General Principles. New Haven: Yale University Press.
