800.51 W 89 Hungary/43: Telegram
The Secretary of State to the Ambassador in France (Herrick)
173. L–78 for Logan. Your L–170, May 26, 4 P.M. regarding Hungarian Reconstruction Loan.
Department has received letter from Secretary of the Treasury dated May 29th, 1924, containing following statement:
“Acting, therefore, under the authority conferred on me as Secretary of the Treasury of the United States by the Act above referred to, I advise you that the lien of the obligations of the Government [Page 332] of the Kingdom of Hungary in the principal amount of $1,939,000, issued under the terms of the agreement dated April 25th, 1924, between the Government of the Kingdom of Hungary and the Government of the United States of America, providing for the refunding of the indebtedness of the former to the latter, is hereby subordinated to that of the loan for reconstruction purposes, in the amount of 250,000,000 gold crowns, contemplated by the plan approved by the Reparation Commission under date of February 21, 1924, without prejudice, however to the priority over costs of reparation to which such obligations are entitled.”
Treasury letter also states:
“From your letter dated May 24, 1924, it is understood that on May 20, 1924, the Reparation Commission unanimously adopted a vote providing in effect that the bonds to be issued pursuant to the agreement in question shall be secured in the manner above indicated, having priority over all costs of reparation, in accordance with the understanding throughout the negotiations between the Hungarian Minister at Washington and the World War Foreign Debt Commission, forming the basis of the agreement reached. The bonds to be issued pursuant to the agreement in question have this day been received from the Hungarian Minister at Washington in exchange for the obligation of the Government of Hungary designated as Relief Series C of 1920, above referred to, in accordance with the provisions of paragraph 9 of the agreement in question.”
Please repeat foregoing to Budapest as Department’s 24. Department advising Hungarian Minister in Washington.
Please forward certified copies of letters referred to your paragraph 1 as soon as possible as Treasury desires copies for its files.8
- The copies requested were forwarded by Mr. Logan on June 6, 1924, and transmitted by the Department to the Secretary of the Treasury on June 21 (file no. 800.51 W 89 Hungary/53).↩