871.6363/210: Telegram
The Acting Secretary of State to the Chargé in Rumania (Riggs)
44. Legation’s written despatch 635, July 26, enclosing copy of note of July 21 with memorandum and enclosures from Rumanian Minister for Foreign Affairs. Department instructs you to present the following note to Minister for Foreign Affairs.
The note should be submitted textually together with an unofficial French translation, if you consider it desirable. Acknowledge receipt of this telegram and telegraph subsequently date of presentation to Minister for Foreign Affairs. A copy of the note will be handed to the Rumanian Minister in Washington upon receipt of your telegram. Text of note follows:
“I have the honor to inform you that my Government has instructed me to say that it has given careful consideration to the statements contained in Your Excellency’s memorandum of July 21, 1924, regarding the various questions which have recently been under discussion between the Governments of the United States and of Rumania and between certain nationals of those two countries. I also take pleasure in stating that my Government believes that the memorandum, by its detailed exposition of these questions, will tend to facilitate their further consideration and, it is hoped, early settlement.
The Government of the United States, viewing as it did with no little concern the difficulties which had arisen in connection with its endeavors to reach a ground of common understanding with the Government of Rumania, felt that the danger of future misunderstanding between the two Governments might be lessened by bringing clearly and unmistakably to the attention of Your Excellence’s Government its apprehension over the unsatisfactory status of certain questions of legitimate and immediate interest to this Government and to its nationals. Accordingly it decided to call Mr. Jay to Washington for a personal conference so that on his return to Rumania he would be fully cognizant of the position of his Government and of its attitude in the event that a satisfactory settlement of the principal points at issue could not be reached.
As Mr. Jay will therefore return to his post with a full knowledge of his Government’s views, it will not be necessary to enter into a detailed discussion in this communication of the matters which were dealt with in Your Excellency’s memorandum of July 21st. It seems important, however, to make a brief restatement of the principles for which my Government has consistently stood, principles which have been outlined in greater detail in the various communications addressed to Your Excellency by Mr. Jay.
Thus, it may be stated that my Government considers that any effort to impose upon American creditors without their consent the terms of the Commercial Indebtedness Law would constitute an unwarranted governmental interference with existing private contracts. My Government would not, of course, oppose the reaching of any mutually satisfactory agreement between American creditors and [Page 635] Rumanian debtors. It feels, however, and must again emphasize, that the future of commercial relations between the two countries would be adversely affected by such governmental intervention between private creditor and private debtor as would impair the legitimate rights of the creditor.
With respect to the debts owed by the Rumanian Government to American nationals or companies, it is my Government’s earnest hope that your Government will see its way clear, in its own interest, as well as in the interest of the American nationals concerned, to arrive at mutually satisfactory agreements for the settlement of such indebtedness.
In connection with Your Excellency’s statements regarding the position of the Rumanian Government in respect of its indebtedness to the Government of the United States, I am instructed to point out that this indebtedness was incurred for relief and reconstruction purposes after the cessation of hostilities. Inasmuch as relief credits have generally been accorded a preferred position it could properly be considered that the advances made by the United States to Rumania are entitled to such preferences. Moreover, you will recall that Mr. Bratiano on behalf of the Rumanian Government gave certain definite assurances to the Government of the United States in a letter dated May 17, 1919.40 In the light of these assurances my Government is at a loss to understand the reports which it has received of the payment of substantial sums by Rumania to other governments on account of relief or reconstruction loans, no corresponding payments having been made to the United States.
Under these circumstances my Government is the more reluctant to conclude that it is the purpose of the Rumanian Government to await the consummation of agreements between the United States and all other powers which are indebted to the United States on account of loans incurred during the war, as well as after the armistice, before taking further action toward the payment of interest, the funding or other adjustment of the indebtedness of the Rumanian Government to the United States. In this connection I may invite Your Excellency’s attention to the agreements reached by the United States Government with the Governments of Great Britain, Finland, Lithuania and Hungary for the refunding of war and relief indebtedness to the United States41 and to the fact that negotiations are now in progress with other Governments looking toward similar settlements.
The point of view of this Government with respect to the Rumanian Mining Law has already been outlined in various communications which have been addressed to Your Excellency. This Law is the object of legitimate concern to American interests. My Government has noted the statement in Your Excellency’s communication that the Royal Government recognizes that it is the part of its duty to accord the most ample and complete respect to all vested rights either of foreigners or its own nationals. It is difficult, however, to [Page 636] reconcile certain provisions of the recent mining legislation or the general policy which this legislation appears to indicate with a proper measure of protection for acquired rights. My Government has therefore instructed me to impress upon Your Excellency’s Government that any impairment of vested rights or any discrimination against American interests would be viewed with serious concern by this Government.
Further, it should be pointed out that at a time when the Rumanian Government is passing legislation calculated to postpone the payment of commercial debts by Rumanian debtors for a period of years on the ground that disturbed conditions and depreciation of currency make more prompt payment impossible, your Government, during this same period, is apparently endeavoring to force a liquidation of important American interests, which involves the purchase of these liquidated interests by Rumanian nationals. It is difficult to understand how in an economic situation in which it is said that funds are not available for the payment of existing debts it is yet possible that there will be available the substantial sums necessary for the purchase of important American holdings as apparently contemplated under the law.
Other phases of this subject will be taken up by Mr. Jay as occasion may arise, and it is not my Government’s desire to burden this communication with questions of detail. It is, however, its desire to impress the following situation upon the Rumanian Government: Cordial relations between countries depend upon mutual understanding and confidence. The measures which the Rumanian Government has recently taken have but served to shake that confidence and to raise the question as to whether the Rumanian Government is prepared to accord in the future the requisite degree of protection to American interests.
It is the earnest hope of the Government of the United States that Your Excellency’s Government will appreciate the importance of giving due weight to the above considerations and to the further considerations which Mr. Jay has been instructed to present in person.”