800.51 W 89 Lithuania/26: Telegram

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

38. Your 118, July 30, 3 p.m. Please hand to the appropriate Lithuanian official the following memorandum:

“The American Minister to Lithuania did not fail promptly to communicate to the Government of the United States the inquiry of the Lithuanian Government whether the Government of the United States would protest the ratification by the Lithuanian Assembly of the trade agreement with Germany now before the Assembly which provides for the mutual cancellation of all claims arising out of the war, the German occupation, reparations, and post-bellum supplies etc. The Minister has now been advised that neither the Treasury nor the World War Foreign Debt Commission has authority to consent to a release of the securities provided for in Lithuania’s obligations held by the Government of the United States except in connection with a refunding of the indebtedness of the Lithuanian Government under existing American legislation. The Government of the United States is gratified that the Lithuanian Minister at Washington has been instructed by his Government to inform the World War Foreign Debt Commission that it is ready and willing, subject to ratification by the Assembly of Lithuania, to enter into an agreement providing for the refunding of its indebtedness to the United States upon terms similar to those set forth in the agreement previously concluded by the Government of the United States with the Government of Finland, and the Minister of the United States is authorized to state that, if assurance be given that such an agreement will in fact be concluded, the Government of the United States would not be disposed to raise any objection to the ratification of the proposed agreement with Germany.”

[Paraphrase.] The following is for your information: In view of the provision that Lithuania’s obligations shall be entitled to security of and shall be charge upon any payments or property received from Germany or from its allies by way of reparation or cession equally with all other notes which represent similar advances to Lithuania since the Armistice by other Allied and Associated Powers, the Treasury thinks that the suggested ratification of the trade agreement with Germany seems to release the security definitely provided for these obligations. In view, moreover, of the theory advanced informally by Mr. Narushkevich that payments were to be made the United States only from reparations received by Lithuania, [Page 138] a theory which has not, as far as the Department is aware, been discarded by Lithuania, although it is wholly inacceptable to the Government of the United States, it is obvious that should the Lithuanian Government adopt this view as its position the ratification of the proposed agreement with Germany would preclude the possibility of recovery by the United States upon obligation in question. The release of this security, furthermore, by the United States seems all the more inappropriate if any payments have been made to the British Government on obligations similar to those held by this Government unless it is understood definitely that Lithuania’s indebtedness to the United States be refunded at once.

Department observes from your despatch no. 1540, December 7, 1923,4 that you expected to inform Mr. Narushkevich of the views of this Government in the matter but the Department does not have a record that you have yet done so. The Department presumes, however, that you did, and that the Lithuanian Government is fully aware of the views of this Government in the matter as stated in the Department’s instruction no. 78, November 7, 1923,5 and concurs in them. If you have not taken up this matter, consult Department before taking action in regard to it. [End paraphrase.]

Grew