863.48/177: Telegram
The Commissioner at Vienna (Frazier) to the Acting Secretary of State
[Received December 10—4:04 p.m.]
384. At invitation of the Austrian Prime Minister I attended a conference today at Foreign Office between the Prime Minister, Minister of Supply, Finance Minister, the British Minister and French and Italian Chargés d’Affaires. Prime Minister after introductory remarks called upon the Minister of Supply for a report. The latter stated that 60,000 tons wheat and rye which must come from America were necessary to tide over the period from January 15th to February 24th, 1922 [1921], after that he had contracts with Roumania and Jugoslavia which would furnish grain until the middle of April. Great Britain had guaranteed credit for the necessary tonnage for American grain which would come partly to Trieste and partly to some North Sea port but that no credit existed to pay for the grain itself. Minister of Finance then reported that the Austrian Government had been unable to raise money by mortgaging Austrian securities held abroad as so many of the holders of these securities had subsequently changed their nationality. He further stated that the art dealer Duveen had offered a million pounds as an advance on the national collection of Gobelin tapestries but that this had been declined as the tapestries were worth much more. Furthermore Reparation Commission had not authorized the Government to pawn Gobelin tapestries. He terminated his report by saying that no other resource was open to Austrian Government but to purchase the necessary amount of dollars in the open market with Austrian notes. This he thought would precipitate a financial crisis. The Prime Minister then informed the Allied representatives that if his Government were unable to raise the necessary credits for the 60,000 tons grain and the Allies were unable to help them they could not longer assume the responsibility of governing the country. Both the British Minister and the Italian Chargé d’Affaires here entered a protest and stated that the Government could not shirk their responsibility until they had exhausted every possible means of raising the necessary money themselves.
Situation here is very critical as Great Britain and France show no inclination to come to assistance of Austria. My opinion is that it would be wiser for the Government to temporize and postpone a crash until the spring as the cold weather combined with the increasing difficulty of securing food from the country will inflict great suffering upon the population.