Office of the Historian

863.51 Relief Credits/4

The Secretary of State to the Secretary of the Treasury (Mellon)

Washington, January 7, 1928.

Sir: With reference to this Department’s letter of December 23, 1927, regarding the Austrian relief indebtedness to the United States and the proposed flotation of a new Austrian loan, I have the honor to transmit for your consideration a copy of note No. 2531/70, dated December 28, 1927, from the Austrian Minister at Washington.

You will note that the Austrian Minister requests that there be recommended to Congress appropriate legislation authorizing the postponement of the relief credit lien for a period of thirty years from the date of issue of the contemplated new Austrian loan. The Minister also requests an early reply to his previous inquiry whether the Government of the United States is willing to enter into negotiations for a settlement of Austria’s relief debt along the lines indicated in his note No. 2423/70 of December 6, 1927.

I also transmit herewith a copy of a letter, dated December 29, 1927, from Mr. R. C. Leffingwell of J. P. Morgan and Company, regarding discussions in progress between the Austrian Government and the European Relief Creditor States. This letter gives further information as to the nature of the arrangement which the Austrian Government appears to contemplate. The first paragraph of Mr. Leffingwell’s letter indicates that the United States may be invited to keep in touch with the discussions understood to be proceeding at London.

The Department will be glad to have your reply to its letter of December 23 and the present letter at your earliest convenience. I suggest that, if you concur, this Department now inform the Austrian Minister in the sense indicated in the Department’s letter of December 23, pointing out that the consideration by this Government of the [Page 475] proposal to defer the lien would be facilitated by the receipt of more specific information as to the proposal for funding the relief debt, since this Government would like to consider both subjects at the same time.

I have [etc.]

For the Secretary of State:
W. R. Castle, Jr.

Assistant Secretary