800.51 W 89 Lithuania/12

The Minister in Estonia, Latvia, and Lithuania ( Coleman ) to the Secretary of State

No. 1275

Sir: With reference to the Department’s telegram No. 31 of August 7:7 P.M. instructing me to ascertain from the Lithuanian Government whether payments have been made and are being made to the Government of Great Britain on obligations similar to those held by the United States Government, I have the honor to inform you that the Government of Lithuania has not yet sent an official [Page 274] reply to my note but I am in a position to inform the Department that the situation is as follows:

The Lithuanian Government has no outstanding obligations to foreign Governments except to the United States. It is, however, indebted to certain private firms in Great Britain to the amount of 18,000 pounds sterling on which interest is being paid.

Further, I am confidentially informed that Dr. Narushkevich, formerly Lithuanian representative in London, and at present in Geneva, as one of the Lithuanian delegates to the current session of the League of Nations, will proceed to Washington after the adjournment of this session to take up the question of the Lithuanian debt.

In an informal conversation in Kovno last week, Mr. Narushkevich informed Mr. Morgan5 that the American loan was secured by Lithuania’s claim for reparations from Germany; and no payments were to be asked until reparations had been secured; and since no reparations have been paid by Germany up to this time, the loan is, strictly speaking, not due. Dr. Narushkevich intimated he would ask that Lithuania be permitted to postpone payment of the loan until the money necessary for its liquidation had been obtained from Germany; or would try to cancel the loan by transferring Lithuania’s claim against Germany to the United States.

Mr. Narushkevich has been chosen to discuss this question in Washington because he himself negotiated the loan with the Liquidation Committee in Paris in 1919, and is therefore well informed on the entire question.

As the Legation has no copy of the note signed by Mr. Narushkevich on behalf of the Lithuanian Government, showing its indebtedness, I should be glad if the Department would be so good as to send me a copy, in order that I may be better informed as to the terms under which the loan was negotiated and may satisfy myself as to the soundness of Mr. Narushkevich’s contentions.

In this connection it is worthy of note that the Lithuanian Government is desirous of borrowing money abroad for various public works including the construction of two railways connecting Memel with Kovno from the north and from the south. The first line runs from Koslawa Euda, on the main line from Kovno to Eydtkuhnen, passing through Schaki, Jurburg, Tauroggen, Lawkow, Retowo, and Gorshdy to Memel. The second line runs from Keidany through Rossieny and Koltynjany to meet the above line at Lawkow.

British capitalists have, I believe, been sounded as to the possibility of raising the necessary funds in London, but no definite offer has been made on either side. I have been promised a copy of the Lithuanian offer when it is drawn up.

I have [etc.]

F. W. B. Coleman
  1. Stokeley W. Morgan, first secretary of legation at Riga.