The City, which comprises the Municipality of Danzig and surrounding territories, was established in conformity with the Treaty of Versailles (Arts, 100-108) and placed under the protection of the League of Nations. In 1920 Danzig became a Free and Sovereign City under the Protection of the League of Nations. Based on the Peace Treaty of Versailles and on the Conventions of Paris and Warsaw (1919 – 1921), Poland retained however some economic privileges safeguarding its free access to the Baltic: Polish civilian ships had free entry to the harbor, Poland took over the administration of the Danziger railways, which were now administred by the Direction of the Polish State Railways at Torun, Poland had the right to maintain a separate Post Office, Danzig and Poland were united in a customs union The same treaties also transferred to Poland all diplomatic and consular representations of Danzig, which did however retain the right to conclude treaties, join international organizations, etc. Later (in 1924, with effect from 1926) the League of Nations also alllowed Poland to establish a munition depot on the Westerplatte peninsula and to maintain a small garrison (ca 90 men). On the 1 September 1939 Free City of Danzig was incorporated into German Reich. After the WW II ended the territory of Free City of Danzig was incorporated de facto into Poland, the City was placed provisionally under the administration of Poland. However de jure it may still be in existence, as it was never properly liquidated.
Extracts from Stock Exchange Year Book (London) 1982/3.(Seoyb) and Moody’s Government and Municipal Manual 1925 (Moody)
- Free City of Danzig 6 1/2% (now 4 1/2%) (Tobacco Monopoly) State Loan
The Tobacco Monopoly was established on 31 Mar 1927, the concession for 20 years (subject to renewal) being granted to the Danziger Tabakmonopol AG in return for 33 1/2% (increased to 35% from 1 Jan 1929) of the retail price of all tobacco goods sold within the Free City plus a share of the profits, subject to a guaranteed minimum of G6,000,000 pa.
LOAN CAPITAL: 6 1/2% 20-Year Sterling Bonds: Issued £1,900,000. Outstanding after 1 Oct 1938 £1,168,500 t, viz British issue £906,360 (of which £800,750 is payable in sterling and £105,600 is stamped as payable in gulden) and Dutch issue £262,150 (of which £188,600 is payable in sterling and £73,550 is stamped as payable in gulden). Issued in Jun 1927 at 91%: £1,520,000 in London and £380,000 on the Continent. Agents: Williams & Glyn’s Bank p.l.c., 5-10 Great Tower St, London EC3R 5DH; J. Henry Schroder, Wagg & Co Ltd., 120 Cheapside, London EC2V 6DS.
Direct obligation of the Free City. Secured by a first and exclusive charge, in favor of the trustee appointed by the League of Nations, on (a) the receipts from the tobacco monopoly and (b) the excise on spirits (including vinegar); all gross receipts from these sources are credited to special accounts in the books of the Treasury (Staatshauptkasse), from which there is transferred monthly to the Bank of Danzig one-sixth of the half-yearly service of the loan for monthly remittance to London, the Free City being entitled to deliver bonds and matured coupons in part satisfaction of these remittances; from 1 Oct 1937 the amounts for half of the service were regulated by a new table of interest and amortization annexed to the memorandum of 27 Aug 1937. Any monthly surplus over sixth part is -yearly at the disposal of the Free City, but in the event of the amounts passed to the special accounts totaling in any one year less than 1 1/2 times the annual service of the loan, then other revenues shall be assigned sufficient to maintain such standard. If for each of five consecutive years the revenue from the tobacco monopoly exceeds 1 1/2 times the service of the loan, the charge on the excise on spirits may be released, but should the revenue thereafter fall below such standard, the Free City is obliged to charge additional revenue approved by the trustee. The Free City undertakes that nothing shall be done (except with the trustee’s consent) to reduce the sums received under the tobacco monopoly contract or the excise on spirits, and that if for any cause the present tobacco monopoly contract is cancelled or modified then all revenues from tobacco shall be charged with the service of the loan as a first and exclusive charge.Redeemable (1) by 1 Oct 1952 (extended from 1947) by a sinking fund operating half-yearly by purchase at or under par (not later than Feb and Aug) or by drawings (in March and September) for repayment at par on 1 Apr and 1 Oct (began Oct 1928); or (2) as a whole on 40 days’ notice from the Free City (a) at 102% on 1 Oct 1932 or (b) at par on any interest date on or after 1 Oct 1937. Interest (6 1/2% up to 1 Oct 1937) 1 Apr, 1 Oct; regularly paid to 1 Apr 1939, as to later payments see below. Principal and interest (free of all Free City taxes) payable (on non-Danzig held bonds) in sterling in London (at agents given above) or at the buying sight rate of exchange on London in Amsterdam (Nederlandsche Handel Mij.), Berlin and Danzig (Deutsche Bank). No special provision as to prescription.Bearer bonds (of £1,000, £500, £100 & £50). British issue bonds non-Danzig held, the numbers of which can be seen in the Quotations Department of The Stock Exchange, are officially listed.
LOAN SERVICE MODIFICATION: In September 1937 there was published a memorandum dated 27 Aug 1937 containing proposals by the Free City for certain changes in the terms of service, including the reduction of the rate of interest to 4 1/2% as from 2 Oct 1937 and the extension of maturity to 1952. The proposals were recommended for acceptance by the League Loans Committee. Holders were requested in Nov 1937 to deposit their bonds for enfacement. Holders of over 99% of the bonds accepted the proposals.
By Decree of 25 Apr 1939 holders resident in Danzig were required to deposit their bonds with the Bank of Danzig for conversion into gulden bonds by being stamped as payable in gulden at the Bank of Danzig (at G25 per £1).
In Jul 1939 the transfer of foreign exchange for the loan service was suspended by a decree providing that until further notice payments would be made only in blocked gulden. The League Loans Committee (London) announced that this constituted a breach of the Aug 1937 agreement involving the restoration of the bondholders’ original rights; on the recommendation of the Committee sinking fund purchases were suspended and the sterling funds in hand applied to payment of coupon due 1 Oct 1939 (coupon 24, which was marked and returned to holder) at 4 1/2% pa; no payment since (see above).
In July 1976, the Government of the Polish People’s Republic made a final offer to repay (in sterling) 35% of the nominal value of the sterling bonds from 1 Aug 1976 in full settlement of capital and interest. The offer will remain open for acceptance until 1 Aug 1980. The above offer does not cover (1) bonds stamped by the authorities of the former Free City of Danzig as payable only in Danzig Gulden and (2) bonds which carry a stamp or other evidence that such bonds were taken by the German Nazi authorities during the Second World War unless the holder of any such bond is able to prove that he acquired it in good faith on the London or Amsterdam Stock Exchanges before the date of publication of the above offer.
See also Danzig (Municipality of) 7% (5%) 1st Mortgage Loan of 1925 [under Corporation Stocks – foreign] and Danzig Electric Tramway Co. 7% (5%) Mortgage 20 year Sterling Bonds 1928 [under Companies alphabetic section], both of which were covered by Polish Government’s offer of Jul 1976.The paying agents for this offer are Williams & Glyn’s Bank p. I.c., International Banking Div., P.O. Box 450, 5~10 Gt. Tower St, London EC3R 5DH.
- Municipality of Danzig 7% (now 5%) Mortgage Loan
Part of the Free City of Danzig 7% (5%) Mortgage Loan, 1925. Agents: Williams & Glyn’s Bank p.l.c., 5-10 Great Tower, London EC3R 5DH; J.Henry Schroder, Wagg & Co Ld, 120 Cheapside, London C2V 6DS. Issued £1,500,000. Outstanding after 1 September 1940 £561,300 (of which £508,500 is payable in sterling and £52,800 is stamped as payable in gulden). Issued through the agents in Apr 1925 at 90% for completion of hydro-electric works, extension of waterworks, development of harbor, etc.
In July 1976, The Government of the Polish People’s Republic made a final offer to repay (in sterling) 35% of the nominal value of the sterling bonds from 1 Aug 1976 in full settlement of capital and interest. The offer will remain open for acceptance until 1 Aug 1980. The above offer does not cover (1) bonds stamped by the authorities of the former Free City of Danzig as payable only in Danzig Gulden and (2) bonds which carry a stamp or other evidence that such bonds were taken by the German Nazi authorities during the Second World War unless the holder of any such bond is able to prove that he acquired it in good faith on the London or Amsterdam Stock Exchanges before the date of publication of the above offer. The paying agents for this offer are Williams & Glyn’s Ltd, International Banking Div., P.O. Box 450, 5-10 Gt. Tower St, London EC3R.
The Council of the League of Nations appointed a trustee to supervise the expenditure of the proceeds of the loan in accordance with the program approved by the League and to sanction proposals made by the Municipality for dealing with any of the mortgaged properties. Direct obligation of the Municipality; secured by a specific and exclusive 1st mortgage on (a) all lands, buildings and other property capable of being mortgaged under the law of the State (Free City of Danzig) pertaining to the municipal electrical, gas and waterworks undertakings, including all extensions to be made out of the proceeds of the loan, the properties mortgaged being officially valued at G60,000,000; and (b) freehold lands and buildings thereon officially valued at G37,785,000. The gross receipts from the electrical, gas and waterworks undertakings were credited by the Municipality to a special account, from which it transferred fortnightly in sterling to the Bank of Danzig an amount equal 13/88 of the half-yearly service of the loan for monthly remittance to the British Overseas Bank Ltd., in London; from 1 September 1937 the amounts for half-yearly service were fixed at £16,346 for half-year to 1 Mar 1938, £32,945 for half-year to 1 September 1938 and £37,740 each half-year thereafter, applicable first to payment of interest and the balance to redemption: gross receipts for year to 31 Mar 1938 G19,271,843 (1936-1937 G17,591,351).
Redeemable by 1 Mar 1950 (extended from 1945) by cumulative sinking fund operating half-yearly by purchase under par (not later than Jan and Jul) or by drawings (Feb and Aug) for repayment at par on 1 Mar and 1 September (began Mar 1926); or earlier (as a whole) at par on any interest date on or after 1 Mar 1935 on 40 days’ notice from the Municipality. Interest (7% up to 1 September 1937) 1 March, 1 September; regularly paid to 1 Mar 1939; payments due 1 September 1939 and 1 Mar 1940 were made at 5% pa and 4% pa respectively, coupons being marked and returned to holders; no payment since (see above). Principal and interest (free of all taxes other than English) payable (on non-Danzig held bonds) in sterling (at agents given above). No special provision as to prescription.
Bearer bonds (of £50, £100, £500 & £1,000). By-Order dated 18 Jun 1979 of The Stock Exchange Council listing of non-Danzig held bonds was cancelled.
LOAN SERVICE MODIFICATION: In September 1937 there was published a memorandum dated 27 Aug 1937 containing proposals by the Municipality for certain changes in the terms of service, including the reduction of the rate of interest to 5% as from 2 September 1937 and the extension of maturity to 1950. The proposals were recommended for acceptance by the League Loans Committee. Holders were requested in Nov 1937 to deposit their bonds for enfacement. Holders of over 99% of the bonds have accepted the proposals.
By Decree of 25 Apr 1939 holders resident in Danzig were required to deposit their bonds with the Bank of Danzig for conversion into gulden bonds by being stamped as payable in gulden at the Bank of Danzig (at G25 per £l). In Jul 1939 the transfer of foreign exchange for the loan service was suspended by a decree providing that until further notice payments would be made only in blocked gulden. The League Loans Committee (London) announced that this constituted a breach of the Aug 1937 agreement involving the restoration of the bondholders’ original rights. On the recommendation of the Committee sinking fund purchases were suspended and all sterling funds in hand were applied in paying coupons (numbers 29 & 30) due 1 September 1939 and 1 Mar 1940 (see above).
- DANZIG ELECTRIC TRAMWAY COMPANY Danziger Elektrische Strassenbahn A.G.
Office: Jaschkentalerweg 48, Danzig-Langfuhr.London Bankers: Williams & Glyn’s Bank p.l.c. (for British Overseas Bank Ltd.); J. Henry Schroder, Wagg & Co Ld.Incorporated in Danzig 22 Sep 1899. For particulars of tramway concession granted by the municipality see vol. for 1940.
LOAN CAPITAL 5% mortgage 20-year sterling bonds. Authorised and issued £225,000. Outstanding at 31 Jan 1940 £149,800 (of which £145,500 is payable in sterling and £4,300 is stamped as payable in gulden). Issued in Aug 1928 at 95% (by sale through British Overseas Bank Ltd., and Helbert Wagg & Co Ltd). Secured by trust deeds of 2 Aug 1928 & 11 Apr 1949 (now to Glyn, Mills & Co) as a 1st mortgage on all lands, buildings and other property capable of being mortgaged under the law of Danzig.Redeemable at 110%:(1) by 1 Oct 1953 (formerly 1948) by cumulative sinking fund (began 1 Oct 1929) operating by drawings (in Feb and Aug for repayment on 1 Apr and 1 Oct) at 110% or (2) earlier (as a whole) on any interest date on or after 1 Oct 1937 on 40 days’ notice from the company. Interest 1 Apr, 1 Oct (at 7% up to 1 Oct 1937) regularly paid to 1 Oct 1939. Principal and interest payable in London only at Williams & Glyn’s Bank p.l.c., International Division, 5-40 Gt Tower St, London EC3. No special provision as to prescription of coupons and drawn bonds not presented. Bearer bonds (of £100). Non-Danzig held bonds the numbers of which can be seen at the Quotations Dept of the Stock Exchange are officially listed.By Decree of 25 Apr 1939 residents in Danzig were required to deposit their bonds with the Bank of Danzig for conversion into gulden bonds by being stamped as payable in gulden at the Bank of Danzig (at G25 per £1). In Jul 1976 the Government of the Polish People’s Republic made a final offer of settlement of 35% of nominal value in cash in full settlement of capital and interest, payable from 1 Aug 1976 and open for acceptance until 1 Aug 1980. The offer does not cover bonds stamped as payable in Danzig gulden, or those carrying a stamp or other evidence of being taken by Nazi authorities during the Second World War unless holders can prove acquisition in good faith on London or Amsterdam Stock Exchanges before publication of this offer.See also Danzig (Municipality of) 7% (5%) 1st mortgage loan 1925 and Danzig (Free City of) 6 1/2% (now 4 1/2%) (Tobacco Monopoly) State Loan, both of which were covered by Polish Government’s offer of Jul 1976. Paying agent Williams & Glyn’s Bank p.l.c., International Banking Division, P.O. Box 450, 5-10 Great Tower St, London EC3R 5DH.
- Danzig Port and Waterways Management Board
/description will follow in due course/