763.72113 Au 7/16

The Austrian Minister (Prochnik) to the Secretary of State

No. 2382/70

Excellency: The return to its rightful owners of Austrian property held by the Alien Property Custodian is a matter in which the Federal Government of Austria is deeply concerned. Insignificant as the amount involved may appear in comparison to the figures tipping the scale of financial and economic balance in the United States it is of no small consequence in the combine of measures partly taken partly under contemplation in Austria with a view of restoring private business to a state of normalcy. It is the conviction of my Government that the successful restoration of public household could only be of lasting duration, if the efforts made in aforementioned direction will meet a like success.

The Austrian property is held, as Your Excellency are aware of, as a security, to insure payment of claims, which the Government or citizens of the United States or both may have against the Austrian Government for damages resulting from acts of war. These potential claims, claims against the Government, are therefore responsible for the failure of Austrian private citizens and rightful owners obtaining their property seized in this country during the war.

The Federal Government of Austria keenly feels this responsibility, the more so, as Congress had in connection with the Winslow-Act37 resolved, that enemy property in excess of $10,000. should be further retained—until “other suitable provisions” are made by the respective Governments to take care of American War Claims.

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My Government, as Your Excellency may recall, tried at two previous occasions38 to free private property from restrictions incurred through their own obligations and sought to provide by an agreement for such “other suitable provisions”, which would be accepted in lieu of seized private property and open the way for an Act by Congress returning it to the rightful Austrian owners.

These efforts failed for two reasons chiefly.—First, because the work of the Tripartite Claims Commission, adjusting American claims, had not sufficiently progressed to enable a somewhat accurate estimate as to the magnitude of claims involved, and second, because the securities offered by the Austrian Federal Government did not seem to satisfy the Government of the United States and the Treasury Department in particular.

The present state of affairs in the Tripartite Claims Commission, however, is now sufficiently advanced to permit a calculation of the sums which in due course of procedure will be charged against the Austrian Federal Government and to make a new and precise offer for their payment.

I am in a position to submit on behalf of my Government the following proposal. The Austrian Federal Government is ready to place at the disposal of the Government of the United States the money held in Trust by the Alien Property Custodian for the Austrian Government including the Imperial Royal Tobacco Monopoly also known under the name of K. K. Österreichische Tabak Regie, and to supplement it by a cash deposit up to a total of two and a quarter million dollars. This sum, although it will prove to more than fully cover the awards ultimately to be rendered by the Tripartite Claims Commission and charged against my Government, is offered in this extent with a purpose of allowing an ample margin and removing all conceivable causes which may obstruct a speedy return of seized Austrian property.

The Austrian Federal Government asks the Government of the United States to recommend to Congress in course of its next session an Act of legislation which would authorize the Alien Property Custodian to release Austrian property as soon as it has been ascertained in a statement made by competent authorities (Treasury of the United States in agreement with Hon. Edwin Parker, Commissioner, Tripartite Claims Commission) that a sufficient cash amount has been [Page 303] deposited by the Federal Government of Austria to take care of all her obligations arising from awards rendered and to be rendered by said Commission.

The decision, when the moment for making such a declaration has come, will be left entirely to the discretion of the said competent authorities. The Federal Government of Austria believes, however, that in the near future the work of the Tripartite Claims Commission will be far enough advanced to allow, even before a complete adjustment of all claims, a statement as afore indicated.

This would be the case f. i. if the Commissioner and the American Agent in course of the proceedings of the Tripartite Claims Commission should come to the conclusion that the total of the awards already rendered as well as the claims still under consideration will at their highest possible extent and value not exceed the 2¼ million cash deposit.

I have the honor to pray Your Excellency to kindly support my Governments request and offer. I may add that the prerequisite prescribed by Congress for the return of property, i. e. the making of “other suitable provisions” for the satisfaction of American claims, seems more than fully complied with in the offer of a cash security and payment made by my Government. While in view of American traditions and the policy followed by Your Government the seized private property could hardly be regarded a true collateral, (American opinion being loath to satisfy claims against a Government with property seized from private citizens) the cash deposit of my Government is lacking this deficiency in its character as a security or collateral, offering no moral or judicial objections against its application towards the settlement of just American claims against the Austrian Government.

Accept [etc.]

Edgar Prochnik
  1. Approved Mar. 4, 1923; 42 Stat. 1511.
  2. See the Austrian Minister’s letter to the Under Secretary of the Treasury, Nov. 10, 1926, Foreign Relations, 1926, vol. i, p. 138. A modification of the plan proposed in that letter was submitted by the Austrian Legation in January 1927 (not printed). The Secretary of the Treasury in a letter to the Secretary of State, Feb. 5, 1927 (not printed), stated that in view of lack of information and the impossibility of obtaining action in the current session of Congress it would be best to defer action until the next session of Congress (file No, 763.72113 Au 7/13).