It is the unalterable fate and the inevitable risk of any debt that its value is closely connected with the fate and actions of the debtor whose assets are subject to the liability. This applies especially to the public debts of a belligerent state whose wealth and resources, and sometimes its very existence, are at stake. The domestic laws of almost every civilized country protect the creditor against the effects of legal changes and of non-remunerative mutations affecting all or an important portion of the property subject to the liability. This liability remains with the transferred property. To a certain extent it is legally vested in the person who succeeds to the property rights.

The field of international law in general is sharply demarked from that of municipal law, but it is the individuals, composing the population of the various states and nations, who furnish the points of contact where international friction may be generated. With the claims of a citizen or subject against his own government, and its officers and agencies, international law naturally has nothing to do. But when an individual asserts a claim against a government not his own, or against the individuals who carry on its operations, such a claim falls on one side or the other of the boundary between international law and municipal law, according to whether the claimant has or has not an adequate remedy in the ordinary courts of the state against which the claim exists.

During the year 1938, the seventeenth year of its existence, the Permanent Court of International Justice was in active session for a total of 69 days—from April 29 to June 30; on July 13 and 14; and from November 28 to December 1. This compares with 107 days of active session in 1937, 143 days in 1936, and 107 days in 1935.

The shade of distinction sought to be shown by the title of this paper may require explanation. Imperfect wording involves either carelessness or ignorance; bad faith indicates dishonesty; nonexecution or disregard implies laxness in the government, if not carelessness; adverse or hostile municipal or judicial action connotes lack of coordination between the internal and external affairs of the State. It follows that such adverse action may be considered from a practical point of view as almost a normal kind of violence against international contracts. It is not to be excused on that account, but it may be considered as a frictional incident almost inseparable under some conditions from the existence of a State. Given either a government of definitely separated elements, such as the United States, or a government without much stability, or a State founded on a type of civilization different from the European order, and this sort of violation of treaty may be forecasted with certainty. Fortunately, however, the instances that cause contractual friction of this sort are of the grosser kinds of personal violence, or are commercial; they are not of a political character, cannot be said to involve policy, and only by a stretch of the imagination involve the tweedledum and tweedledee of international relations, “national honor and vital interest.” They are consequently extremely susceptible to simple and orderly solution.

The fourteenth year of the Permanent Court of International Justice has been one of its lean years. The Court’s output has been small, and action by governments with reference to its maintenance and functioning has been somewhat less significant than in some of the earlier years.

During 1935, the Court was in session for 107 days as compared with 120- days in 1934,178 days in 1933, and 240 days in 1932. The 34th session, from February 1 to April 10, 1935, was largely devoted to the case relating to Minority Schools in Albania, in which an advisory opinion (the 26th) was given on April 6,1935. The 35th session, from October 28 to December 4, 1935, was largely devoted to the case relating to the Consistency of Certain Danzig Decrees with the Constitution of the Free City of Danzig, in which an advisory opinion (the 27th) was given on December 4,1935. At the close of the year two cases were pending on the docket of the Court.