800.51 W 89Czechoslovakia/110: Telegram

The Acting Secretary of State to the Minister in Czechoslovakia (Einstein)

37. Your despatch 894, July 28.16 Please present the following note and telegraph date it bears:16a [Page 131]

“Under instructions from my Government, I have the honor to acknowledge the receipt of your note of July 2216b in reply to my note of April 30, 1925, concerning the indebtedness of Czechoslovakia to the United States.16c

My Government notes that the Czechoslovak Government formally acknowledges its indebtedness in the principal amount of $80,234,808.02 and that it is ready to proceed immediately to a verification of settlement in respect of the remaining sum, the principal amount of which is $11,644,863.01. My Government considers that, since the amount in question is but a relatively small part of the total indebtedness of Czechoslovakia to the United States, a settlement might be made in respect of the total principal sum of $91,879,671.03, and in respect of unpaid interest, and that any items in dispute which may thereafter be established not to be due to the Government of the United States may be suitably credited in a manner to be specified in the debt funding arrangement.

My Government has also noted the views expressed in regard to the fiscal and economic condition of Czechoslovakia. I am authorized to assure you that the World War Foreign Debt Commission will be prepared to give due consideration to such data as the representatives of Czechoslovakia may wish to present in that regard.

With respect to the suggestion that the Czechoslovak Government pay to the United States in 1926 the sum of $2,500,000 as a first installment on the acknowledged debt, I am instructed to say that my Government, especially in view of the settlements made by Czechoslovakia with other creditor governments in disregard of the agreement between Czechoslovakia and the United States as set forth in my note of April 30, 1925, could not agree to postpone a settlement or make only a partial settlement of Czechoslovakia’s indebtedness. My Government feels confident that a suitable basis of settlement in respect of Czechoslovakia’s indebtedness to the United States can readily be reached at the present time. In this connection, it may be pointed out that the service of Czechoslovak foreign loans already floated calls for annual payments larger than those which would be required under a settlement of the indebtedness to the United States along the line of the settlements already made between the Government of the United States and other debtor Governments. It may further be pointed out that, according to the basis of such settlements, the annual payments due on the entire indebtedness of Czechoslovakia to the United States would not be more than approximately one percent, of the total present Czechoslovak budget. The Government of the United States accordingly considers that the Czechoslovak Government, if it can assume the obligation to pay the service of large private loans over a considerable period of years, can forecast its future financial condition sufficiently well to enable it to enter into a suitable agreement with the World War Foreign Debt Commission.

My Government, therefore, as indicated in my note of April 30, 1925, expects the Czechoslovak Government promptly to take suitable action looking towards the settlement of its indebtedness to the United States, and would be glad if the Czechoslovak Government [Page 132]would send to the United States at its earliest convenience a Commission duly authorized to enter into a settlement of the entire amount of the debt in question.”

Grew
  1. Not printed.
  2. The Department was informed by telegram No. 49, Aug. 31, 2 p.m., that the note had been presented that day (file No. 800.51W89Czechoslovakia/113).
  3. Summarized in the Minister’s telegram No. 41, July 23, 1925, supra.
  4. See enclosure to instruction No. 252, Apr. 4, to the Minister in Czechoslovakia, p. 122.