863.51/851
The Secretary of the Treasury (Mellon) to the Secretary of State
My Dear Mr. Secretary: Receipt is acknowledged of the letter of Assistant Secretary Castle (EA 863.51/839), dated October 18, 1927. It is stated therein that the Austrian Government wishes to know whether the Secretary of the Treasury has power, without further authorization by Congress, to extend for an additional period of five years the time of payment of the debt incurred by Austria for the purchase of flour from the United States Grain Corporation.
If such authority is vested in the Secretary of the Treasury it must be derived from the Joint Resolution of Congress of April 6, 1922, c. 124, 42 Stat. 491. By the terms of this Resolution the Secretary of the Treasury was authorized “to extend, for a period not to exceed twenty-five years, the time of payment of the principal and interest of the debt incurred by Austria for the purchase of flour from the United States Grain Corporation and to release Austrian assets pledged for the payment of such loan, in whole or in part, as may in the judgement of the Secretary of the Treasury be necessary for the accomplishment of this Resolution: …”18 By virtue of this authority the time of payment of the debt was extended to June 1, 1943, and the lien given the United States by Austrian Relief Bond No. 1, Series “B” of 1920, which it holds, was subordinated to [Page 454] the Austrian Government guaranteed twenty-five year loan maturing in 1943.
In response to my request of the Attorney General for his opinion as to whether under the Joint Resolution the Secretary of the Treasury might in his discretion further subordinate to the proposed new Austrian Federal Loan the lien given the United States by the terms of the Austrian Relief Bond No. 1, Series “B” of 1920, he stated that “the Secretary of the Treasury has no power to act further under this Resolution . . . .”19 A copy of the opinion of the Attorney General, dated October 15, 1927, was transmitted to you by this Department under date of October 18, 1927.20 The basis given by the Attorney General for his opinion is that “There is nothing in the Resolution to indicate that the authority given the Secretary of the Treasury was to be a continuing one or was to be exercised after the lapse of years and under changed conditions.”
In my judgment the reasoning of the Attorney General in his opinion above referred to necessarily leads to the conclusion that without further authorization by Congress the Secretary of the Treasury has no authority to further extend the time of payment of the debt incurred by Austria for the purchase of flour from the United States Grain Corporation.
Very truly yours,