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THE HONGKONG GOVERNMENT GAZETTE, NOVEMBER 12, 1920.
SCHEDULE,
SECTION III.- DEBTS.
ARTICLE 248.
There shall be settled, through the intervention of Clearing Offices to be established by each of the High Contracting Parties within three months of the notification referred to in paragraph (e) hereafter, the following classes of pecuniary obligations :-
(1) Debts payable before the war and due by a national of one of the Contracting Powers, residing within its territory, to a national of an Opposing Power, residing within its territory;
(2) Debts which became payable during the war to nationals of one Contracting Power residing within its territory and arose out of transactions or contracts with the nationals of an Opposing Power, resident within its territory, of which the total or partial execution was suspended on account of the existence of a state of war ;
(3) Interest which has accrued due before and during the war to a national of one of the Contracting Powers in respect of securities issued or taken over by an Opposing Power, provided that the payment of interest on such securities to the nationals of that Power or to neutrals has not been suspended during the war ;
(4) Capital sums which have become payable before and during the war to nationals of one of the Contracting Powers in respect of securities issued by one of the Opposing Powers, provided that the payment of such capital sums to nationals of that Power or to neutrals has not been suspended during the war.
In the case of interest or capital sums payable in respect of securities issued or taken over by the former Austro-Hungarian Government, the amount to be credited and paid by Austria will be the interest or capital in respect only of the debt for which Austria is liable in accordance with Part IX (Financial Clauses) of the present Treaty, and the principles laid down by the Reparation Commission.
The proceeds of liquidation of enemy property, rights, aud interests mentioned in Section IV and in the Annex thereto will be accounted for through the Clearing Offices, in the currency and at the rate of exchange hereinafter provided for in paragraph (d), and disposed of by them under the conditions provided by the said Section and Annex.
The settlements provided for in this Article shall be effected according to the following principles and in accordance with the Annex to this Section:
(a) Each of the High Contracting Parties shall prohibit as from the coming into force of the present Treaty, both the payment and the acceptance of payment of such debts, and also all communications between the interested parties with regard to the settlement of the said debts otherwise than through the Clearing Offices;
(6) Each of the High Contracting Parties shall be respectively responsible for the payment of such debts due by its nationals, except in the cases where before the war the debtor was in a state of bankruptcy or failure, or had given formal indication of insolvency, or where the debt was due by a company whose business has been liquidated under emergency legislation during the war. (c) The sums due to the nationals of one of the High Contracting Parties by the nationals of an Opposing State will be debited to the Clearing Office of the country of the debtor, and paid to the creditor by the Clearing Office of the country of the creditor ;
(d) Debts shall be paid or credited in the currency of such one of the Allied and Associated Powers, their colonies or protectorates, or the British Dominions or India, as may be concerned. If the debts are payable in some other currency, they shall be paid or credited in the currency of the country con- cerned, whether an Allied or Associated Power, Colony, Protectorate, British Dominion, or India, at the pre-war rate of exchange.
For the purpose of this provision, the pre-war rate of exchange shall be defined as the average cable transfer rate prevailing in the Allied or Asso- ciated country concerned during the month immediately preceding the out- break of war between the said country concerned and Austria-Hungary.
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