863.51/251
The Austrian Chargé (Prochnik) to the Secretary of State
The Chargé d’Affaires of Austria presents his compliments to His Excellency, the Secretary of State, and has the honor to solicit his kind intermediary with a view of having brought to the attention of the Commission to be appointed by the President under Act of Congress ddo. February 9th, 1922, No. 139,2 the urgent necessity of an action, authorizing the Government of the United States to defer a lien hereafter specified which constitutes a first charge on the General Assets of the Republic of Austria.
To relieve the distress prevailing in Austria in the year 1920, the Government of the United States, by authority of an Act of the [Page 616] 66th Congress ddo. March 30th, 1920,3 extended to said Republic, through the United States Grain Corporation, in way of Relief, a food credit to the amount of $24,000,000.—, maturing with 6% interest on January 21st 1925.
At the time of the grant of this Credit no special securities were asked for by the United States, nor offered by the Republic of Austria. In due course, however, when through a decision of the Reparations Commission, based on Article 197 of the Peace Treaty of St. Germain, claims of various countries against Austria, arising partly from a title of reparation, partly from a title of relief, were secured on the Republic’s General Assets and Revenues, the United States likewise obtained for the aforespecified loan Relief-Credit-Bonds (Series B) establishing a special lien on the General Assets of the said Commonwealth.
In the meantime, conditions in Austria grew worse from month to month, owing chiefly to the fact, that the whole economic structure of the newly formed Republic could not, in a short time and without outside assistance, rearrange itself to the changed conditions created by the terms of the Peace Treaty. Realizing these facts, the Principal Allied Powers, anxious to bring about a reconstruction of the economic position of Austria, and to safeguard the maintenance of her existence as an independent Commonwealth, agreed upon a plan, by which in all probability the new Republic could secure that outside financial aid generally believed indispensable for her preservation.
Under the auspices of the League of Nations a Finance Committee was appointed, which proposed to the various bond-holding powers a deferment of their claims for a period of at least 20 years, in order to enable Austria to use her assets as collateral for a loan to be contracted on a scale sufficiently large to rearrange her whole economic structure, to increase her productive power, and to bring about more normal conditions in her Balance of Trade and Budget. Until then, Austria is compelled to obtain the greater portion of her foodsupplies by purchase on foreign markets, without being able to offset in a halfways normal degree, by an adequate production and export, the great liabilities thus incurred. This abnormal state of her Trade-Balance is in particular responsible for the incessant depreciation of her Currency, which causes ever widening circles of the Austrian population to be drawn to a point where the possibilities of the very existence, even under most modest and scanty circumstances, cease. The Austrian Government is vainly straining its efforts to stem this downward move as long as the means are not forthcoming, which would enable the organisation of a permanent [Page 617] relief in place of merely transitory measures. Vast sums were expended in instalments, merely to tide over critical periods of threatening famine. Although these sums were obtained under the greatest difficulties they had hardly any visible effects on the amelioration of general conditions, but aggravated still more the chaotic state of Austrian currency. The Austrian Government is anxious to lead the nation out of an economic period marked by unproductiveness and excessive consume, and for this reason seeks a loan to be secured on the Country’s considerable assets, the proceeds of which are intended to be used in turning the country’s natural resources to greater account, to stabilize the Currency, and to increase in general the Republic’s productive powers. Only with speedy help from outside could this be effected, and the descending curve depicting the course of Austria’s economics brought to a point where it would gradually but constantly turn into an ascending line.
As Austria is compelled to secure this outside assistance through her own efforts, and to offer in way of security her assets still in-cumbered by aforementioned liens, its Government prays the Government of the United States to defer the American claim against those assets.
The Charge d’Affaires of Austria conveying herewith his Government’s above request to the kind attention of His Excellency, the Secretary of State, begs to impress the necessity of speedy action, and to voice the expression of grateful appreciation for the sympathy and interest manifested by the People of the United States and its Government in the Fate of his country.