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PRINTED BY WERTHEIMER, LEA AND CO., 46 & 47, LONDon wall, and CLIFTON HOUSE, worship street, E.c.

DEC 1 0 1927

THE RIGHT HON. LORD AVEBURY, P.C., D.C.L., LL.D., F. R.S., President.

THE HON. SIR C. W. FREMANTLE, K.C. B., Vice-President.

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THE CORPORATION OF FOREIGN BONDHOLDERS was Constitution founded in 1868: it received a Special Licence from the Board of Trade in 1873, and was incorporated by Act of Parliament in 1898. Under that Act the Council of the Corporation consists of twenty-one members, six of whom are nominated by the Central Association of Bankers, six by the London Chamber of Commerce, and nine are co-opted by the Council as a whole-that is by the votes both of the representative and co-opted members. A majority of the members of the Council are thus appointed by independent outside bodies.

The principal object of the Corporation is the protection Objects. of the interests of the holders of foreign securities. In addition to this, however, it keeps elaborate records regarding the economic and financial condition of the various States with whose debts it is called upon to deal, and these records are readily placed at the disposal of investors or other interested parties. The Annual Reports of the Council contain an immense amount of valuable information and are circulated all over the world.

The Council may, and in some cases does, act on its own Procedure. initiative. For instance, it appoints the British representative on the Council of Administration of the Ottoman



Public Debt, and it has also frequently intervened on behalf of individuals whose rights have been prejudiced by the action of a foreign Government.

As a general rule, however, the Council acts through the various Bondholders' Committees associated with it. In the case of the default of a foreign State, or in other circumstances where the rights of the Bondholders are interfered with, the practice of the Council is, on its intervention being solicited by a requisition from those interested, to convene a Public Meeting of Bondholders, and to suggest that a Committee should be appointed by those present. These Committees may, and generally do, elect to act under the Rules and Regulations of the Corporation, but they have a free hand in carrying on the negotiations for a settlement, and the decision as to whether any proposals made by a foreign State shall or shall not be recommended to the acceptance of the general body of the creditors is left entirely to their judgment. The President and the Vice-President of the Council are ex officio members of the Bondholders' Committees, and, if deemed desirable, the Council appoint one or two of its other members to serve on these Committees in order that they may keep in touch with the Council.

At the present time there are twenty separate Bondholders' Committees affiliated to the Corporation, consisting of 215 members. Of this number, thirty-two, exclusive of the President and Vice-President, are members of the Council, and of these a large proportion have been appointed by the Bondholders themselves. The Committees are under no obligation to act in accordance with the views of the Council, but the history of the past thirty years shows that the relations between the Council and the various Bondholders' Committees have been of a thoroughly harmonious and cordial character.

The Council finds the Committees house-room and supplies them with skilled assistance: it places at their disposal the benefit of its long experience in dealing with defaulting States, and, in addition to this, advances such sums as may be required to defray the necessary expenses connected with the negotiations.

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