The Johnson Act of 1934 (Foreign Securities Act, ch. 112, , , 1934-04-13) prohibited foreign nations in debt from marketing their bond issues in the
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
. The law was enacted on April 13, 1934, and although it was impacted by the
Bretton-Woods Agreement, it was not repealed and continues to have the force of law.
Senator
Hiram Johnson
Hiram Warren Johnson (September 2, 1866August 6, 1945) was an American attorney and politician who served as the 23rd governor of California from 1911 to 1917 and represented California in the U.S. Senate for five terms from 1917 to 1945. Johns ...
sponsored the Act that included a passage that forbade loans to nations in default on their debts.
On May 5, 1934,
Attorney General
In most common law jurisdictions, the attorney general (: attorneys general) or attorney-general (AG or Atty.-Gen) is the main legal advisor to the government. In some jurisdictions, attorneys general also have executive responsibility for law enf ...
Cummings rendered an opinion on the meaning of the terms "default" and "partial default" used in the Act. He held that
Czechoslovakia
Czechoslovakia ( ; Czech language, Czech and , ''Česko-Slovensko'') was a landlocked country in Central Europe, created in 1918, when it declared its independence from Austria-Hungary. In 1938, after the Munich Agreement, the Sudetenland beca ...
,
Italy
Italy, officially the Italian Republic, is a country in Southern Europe, Southern and Western Europe, Western Europe. It consists of Italian Peninsula, a peninsula that extends into the Mediterranean Sea, with the Alps on its northern land b ...
,
Latvia
Latvia, officially the Republic of Latvia, is a country in the Baltic region of Northern Europe. It is one of the three Baltic states, along with Estonia to the north and Lithuania to the south. It borders Russia to the east and Belarus to t ...
,
Lithuania
Lithuania, officially the Republic of Lithuania, is a country in the Baltic region of Europe. It is one of three Baltic states and lies on the eastern shore of the Baltic Sea, bordered by Latvia to the north, Belarus to the east and south, P ...
,
Great Britain
Great Britain is an island in the North Atlantic Ocean off the north-west coast of continental Europe, consisting of the countries England, Scotland, and Wales. With an area of , it is the largest of the British Isles, the List of European ...
and
Canada
Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
were not in default, despite the fact only Canada had paid its debts, and
Soviet Russia was in default.
The Act is again relevant now if
Venezuela
Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many Federal Dependencies of Venezuela, islands and islets in the Caribbean Sea. It com ...
withdraws from the
IMF
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of la ...
and
World Bank
The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
(as it says it is doing) and is in default in payment of its obligations "to the United States."
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Economic history of the United States
United States federal securities legislation
1934 in international relations
1934 in economic history
1934 in American law