cross-posted from: https://lemmygrad.ml/post/94628

Quoting Professor Gian Giacomo Migone’s The United States and Fascist Italy, pages 135 and 141:

The total sum to be repaid amounted to $2,042,000,000, calculated by taking the original loan amount, subtracting the payments already made, and adding interest of 4.5 percent until December 15, 1922, and of 3 percent from then until June 15, 1925. Following Mellon’s proposal, this sum was to be repaid in sixty‐two annual installments, like the American loan to Great Britain, but with the first five years of payments to be a minimum of $5 million. In the following ten years, the interest rate would be one‐eighth of 1 percent, increasing each decade by one quarter of 1 percent, to reach a final rate of 1 percent. Only in the final seven years would the interest reach the amount of 2 percent.

This accord was an indubitable financial and political victory for Fascist Italy and, in particular, for the delegation that had negotiated it. The terms were substantially better than predicted during the preparatory meeting in Rome to create the delegation’s orders. In particular, the interest rates and the amounts of the first five annual payments were more favorable than planned for (Volpi had been authorized to accept an annual sum of $8 million).

Above all, the political success scored by Italy became clear in comparison with the accords reached between the United States and other debtor nations. The negotiated payments were equivalent to the cancellation of 80.4 percent of the debt, with an average interest rate of 0.4 percent. This was not far from the figure in Italy’s initial proposal that had been rejected by the United States, in which the cancellation of 90 percent of the debt had been requested.

But it was even more significant compared with the 30 percent remission obtained by Great Britain with an average interest of 3.3 percent, the 50 percent negotiated just previously by Belgium, and the 60.3 percent with an average interest rate of 1.6 percent that France would bargain for in the Mellon–Berger accord the following April 1926.

[…]

In the end, the House of Representatives split down party lines, so that the strong Republican majority ensured a favorable vote for the [Fascist] government. On January 15, 1926, the House ratified the accord with 257 votes in favor and 133 against (including only 17 Republicans). The Senate’s ratification, which took place on April 21, finally closed the Italian war debt question for good, with 54 votes in favor and 33 against.

(Emphasis added.)