840.48/2623: Telegram

The Ambassador in France (Wallace) to the Secretary of State

425. R-307, for Davis. Department’s 305, February 6, your R-207.

After I had conference with British regarding Austrian relief, British announced before Organization Committee Reparations that if United States proposed relief to extent of $50,000,000 was carried out British were prepared to contribute $25,000,000 for relief purposes to be used for the purchase of British goods and for British tonnage; that, in view of assurances of British Minister of Shipping, [they] were prepared to supply from this credit ocean transport for American purchases from $50,000,000 relief credit. British regarded it as essential that [not only] food but raw materials should be now controlled by Austria.
In view of British statement British and ourselves requested representatives on Organization Committee of other countries, namely France, Italy and Belgium, to take up with their Treasuries at once and find just what they were prepared to effect toward furnishing credits for Austrian relief. Italian representative stated that he had already conferred with Italian Treasury on subject but feared that Italy could do nothing in view of shortage of coal in Italy which was paralyzing Italian industry. Bradbury2 made strong appeal stating that in his view Austrian situation threatened foundations of civilization. I pointed out necessity of all Allied Governments making a contribution in order that contributions from neutral Governments could be asked most effectively.
At the request of British, Kent3 has been informally sounding Dutch bankers with a view to their using their influence with Dutch Government to join in credits for Austrian relief. Kent states his suggestions have been well received. I urged upon British that their Government should immediately semi-officially take up matter with neutral governments. British representatives here will recommend such action by British Government but desire that formal application will eventually be made to neutral governments both by United States and Great Britain.
While it is most necessary that neutral governments as well as Czechoslovakia and Yugoslavia shall unite in measures for Austrian relief, if their cooperation is made a prerequisite Austria will probably have starved before comprehensive relief plan can be agreed upon by all.
Austria must be provided with raw materials as well as foodstuffs so that she may start her industries and obtain through her exports foreign exchange with which to secure foodstuffs and more raw materials after contemplated relief measures are exhausted. This phase will be studied in the endeavor to work out plan. It may be that tapestries referred to in Department’s 209, January 28th,4 might be utilized for the purpose of obtaining foreign exchange for raw materials but it is probably inadvisable to attempt to sell same at the moment until general plan has farther progressed. In case Austria is to be permitted to sell tapestries and objects of art an opportunity to nationals of all countries must be given to bid for same not only to give equality of opportunity to nationals of all countries but also to insure largest possible amount being obtained for Austria by this means.
Certain of Austrian neutral securities have been released from [lien] of food advances and made available to Austria, signal action of Organization Committee on this subject will be cabled later.
Steps are being taken to ascertain whether Austria will request Organization Committee to apply reparation clauses of treaty to Austria in advance of exchange of ratifications and to immediately appoint liquidator for Austro-Hungarian Bank. Have urged British to send at once competent financier to examine condition of said bank and they have agreed to do so.
It is hoped that general relief measures for Austria can be fitted into something along lines of plan of Vienna sub-commission with which you are familiar. It would be most advisable to strengthen this sub-commission by appointment thereon of competent financiers who really might be on spot to work out Austria’s [Page 257] future in cooperation with Austrian Government, and private bankers have urged British to thus strengthen their representation on sub-commission, and while they have agreed, they have not yet done so. It is impossible to obtain representative American financier for purpose as [matters] stand at present. Austrian Government is to be asked whether it will provide compensation for such financiers.
Bradbury notified me that Chancellor directed him to say that British negotiations in regard to relief loans are to be conducted by Bradbury with me in Paris. Think it would be well if some one channel here was charged on behalf of United States to conduct these negotiations. Logan5 and I are in conference on this matter daily but neither Ambassador nor I have time for constant conferences on the subject.
Under pending bill Grain Corporation will be charged with establishment of credits with Treasury’s approval. If impossible [possible], I suggest that Grain Corporation express views to Logan, and give him authority to negotiate on its behalf with other countries concerned. I can undertake same duty for Treasury if desired. If this is arranged I suggest that all instructions from Washington on the subject be sent to Logan or to me. I believe messages to Ambassador such as contained in Department’s 172, January 23,6 will only serve to confuse situation.
In order to deal’ with Austrian situation and assuming $50,000,000 credit is separate would like as early as possible some indication as to proportions in which $50,000,000 will be divided among countries requiring relief.
Logan is endeavoring to work out in connection with British: (a) Table showing amount of requirements of various countries concerned, cash value thereof, best sources of supply and cost of freight, and (b) method of organization, Central Bureau of Direction and Coordination. This will be communicated to you as early as possible.
I have shown this cable to Logan who asks that a copy be furnished Hoover as it answers certain inquiries regarding which Hoover has been cabling Logan on these matters. Rathbone.
  1. Sir John Bradbury, British representative on the Reparation Commission.
  2. Fred I. Kent, assistant to the American unofficial representative on the Organization Committee.
  3. Not printed.
  4. James A. Logan, jr., American unofficial assistant representative on the Reparation Commission.
  5. See footnote 97, p. 249.