The British Chargé (Chilton) to the Secretary of State
Sir: I have the honour to inform you that His Majesty’s Government, in conjunction with the French Government, have lately had under consideration the advisability of setting up some centralizing organ to deal with questions arising out of the liquidation of the Relief Credits granted in 1920 and 1921 by certain Allied and Neutral Governments to other Governments in Central and Eastern Europe, and to transmit to you herewith, for facility of reference, a memorandum explaining the steps taken to furnish these credits to the countries concerned. The French Government, while favouring the utilisation of the Financial Committee of the League of Nations for the purpose of dealing with the questions referred to above, has declared that it would have no difficulty in agreeing to any other suggestion embodying the same principle.
His Majesty’s Government entirely share the view of the French Government that the interests of the creditor states will best be served, when the date for repayment of the advances approaches, by acting in unison and dealing with individual debtor states according [Page 130] to the circumstances of each. At the same time, they doubt whether the Financial Committee of the League of Nations would be a suitable body to deal with these credits, even if it were willing to undertake the work. The Committee is a purely advisory body, with no administrative functions; and it is neither intended nor suited for carrying out routine administration demanding constant attention.
A further disadvantage is that its members do not correspond in nationality with all the creditor countries concerned and include at least one member of a debtor nationality. Moreover, the members, do not represent the governments of their countries, and have always regarded themselves as entirely independent experts. It appears essential that where decisions with regard to government advances have to be taken, the deciding body must be strictly representative of the governments concerned.
His Majesty’s Government have therefore suggested that the best course would be for a Relief Credits Committee to be formed, which might meet in London, to whom all applications by debtor governments with regard to their liabilities under the Relief Credits should be referred. The committee would consist of the representatives of the credit-giving governments and would be furnished by those governments with full particulars of the present position of such credits. It would probably be sufficient for the committee to meet occasionally, and it might possibly be formed in the main from representatives already in London.
The Committee (after settling its procedure) would naturally be chiefly concerned with the arrangements to be made with the debtor countries in view of the maturity of a considerable portion of the original bonds on the 1st of January, 1925.
All proposals received by any creditor Government as regards the relief credits would, of course, be referred to the committee, who would be in a position to undertake oral discussions with representatives of each debtor country.
The Committee could also consider whether there would be any advantage in appointing a Trustee as suggested in 1921, though there would seem to be little need for this proposal at this stage.
While His Majesty’s Government suggest that the Committee should consist primarily of the European credit-giving countries, they would naturally welcome the presence of an American representative and, inasmuch as they are aware that, under the United States laws, only the Debt Funding Commission can deal with American Credits, I am instructed to express the hope that, in the event of the United States Government being willing to share in the work of the Committee, a representative of the Debt Funding Commission might be delegated to attend the meetings of the Committee in London. I should be glad to receive in due course an expression [Page 131] of the views of the United States Government in regard to this matter for communication to my Government.
I have the honour to add that His Majesty’s representatives at Christiania and the Hague have been instructed to bring these proposals to the notice of the Norwegian and Netherlands Governments.
I have [etc.]