Abstract: The article focuses on Belgrade municipal borrowing during the Great Depression and its aftermath, up until the start of the Second World War in Yugoslavia in 1941. The loan terms, the distribution of municipal spending, and developments in the Belgrade Municipality’s loan financing during the 1930s are also analyzed. From 1929 to 1941, the Belgrade Municipality received30 loans, all obtained from the local banking institutions. During the Great Depression, all Belgrade municipal loans were short- and midterm, whereas following the Depression, they evolved into long-term. Throughout the 1930s, there was a rising trend of investment in infrastructure, cultural and social institutions, kindergartens and schools, and social housing. In contrast, there was a reverse trend in purchasing municipal properties.

Keywords: Belgrade Municipality, State Mortgage Bank, Municipal Savings Bank, capital markets, municipal loans, infrastructure, social housing

Summary

Belgrade Municipality raised thirty loans between 1929 and 1941. In all these cases money was borrowed from domestic banks, and loans were usually long-term, especially in the aftermath of the Great Depression. The interest rates were also very moderate (5-9%), as they had been in the 1920s. After1929 some changes occurred in terms of fundraising and resource allocation. At the time of Great Depression (1929-1933) the Belgrade Municipality borrowed the money directly from construction companies hired to work on municipal infrastructure projects. The money was also borrowed from the state social institutions in order to finance the municipal social institutions and social housing. One of the loans issued in the late 1930s was specifically for defense purposes. By the 1930s, the Belgrade Municipality could afford to raise loans in order to purchase property within the city area. The Municipal Savings Bank (funded in 1928) also played an important role in municipal borrowing. The Belgrade Municipality received seven loans from this Bank, but more importantly, its bills of exchange served as a collateral for the loans. The vast majority (both in number and total amount) was allocated to municipal infrastructure projects such as pavements, roads and streets. It was followed by loans for the purchase of land in the city area, as well as by those for municipal cultural and social institutions. Throughout the 1930s there was a growing trend of investment in infrastructure, cultural and social institutions, kindergartens and schools and public housing. However, this was not enough for satisfying the needs of the city’s rapidly expanding population. On the other hand, there was a reverse trend in the purchase of municipal property, which was most likely due to ongoing legal disputes with the state.