King Leopold's Bonds and the Odious Debts Mystery

47 Pages Posted: 21 Aug 2019 Last revised: 16 Sep 2019

See all articles by Joseph Blocher

Joseph Blocher

Duke University School of Law

G. Mitu Gulati

Duke University School of Law

Kim Oosterlinck

Université Libre de Bruxelles - SBS-EM, CEB

Date Written: August 14, 2019

Abstract

In 1898, in the wake of the Spanish-American war, Spain ceded the colony of Cuba to the United States. In keeping with the law of state succession, the Spanish demanded that the U.S. also take on Spanish debts that had been backed by Cuban revenues. The Americans refused, arguing that some of those debts had been utilized for purposes adverse to the interests of the Cuban people. This, some argue, was the birth of the doctrine of “odious debts”; a doctrine providing that debts incurred by a non-representative government and utilized for purposes adverse to the population do not need to be repaid by successor regimes.

This Article tests the historical evidence in favor of the birth of the odious debts doctrine at the turn of the twentieth century by considering the treatment of perhaps the archetypal odious debt: the debt that Belgium’s King Leopold undertook to finance his horrific exploitation of the Congo Free State (“CFS”). In 1908, Leopold was forced to transfer sovereignty over the CFS to Belgium. If the doctrine of odious debts existed at the time, we should see evidence of it in the public debate about whether Belgium was obliged to take on King Leopold’s debts. Based on original archival research into political debates, litigation regarding Leopold’s estate, and contemporary prices and yields of Leopold’s bonds, we see no such evidence.

Keywords: Odious Debts, Sovereign Debt, Human Rights

JEL Classification: K22, K33, H64, H74, H81, H87

Suggested Citation

Blocher, Joseph and Gulati, Gaurang Mitu and Oosterlinck, Kim, King Leopold's Bonds and the Odious Debts Mystery (August 14, 2019). Duke Law School Public Law & Legal Theory Series No. 2019-59. Available at SSRN: https://ssrn.com/abstract=3437528 or http://dx.doi.org/10.2139/ssrn.3437528

Joseph Blocher

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Gaurang Mitu Gulati (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States

Kim Oosterlinck

Université Libre de Bruxelles - SBS-EM, CEB ( email )

50 Avenue Roosevelt, CP114/03
Brussels 1050
Belgium

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