863.51 M 82/5
The Minister in Austria (Washburn) to the Secretary of State
[Received February 10.]
Sir: I have the honor to acknowledge the receipt of the Department’s telegram No. 5 of Saturday the 21st instant, 6 p.m., in relation [Page 863] to the proposed Austrian loan. Several groups are badly garbled, but I think I divine the sense of the communication.
Mr. F. Carrington Weems, on behalf of the firm of J. P. Morgan & Co., has been in Vienna for some days collecting data for his principals. He is well equipped for his task, having been here at one time for several months familiarizing himself with the Austrian situation when Zimmermann was Commissioner General. I have talked with the Chancellor this morning, and he is giving instructions to have duplicates of the material which the Government is supplying to Weems furnished to me. The Morgan representative, with whom I am in frequent touch, is making, together with an associate, a very thoroughgoing investigation of Austria’s financial status, and I hope to be able presently to place at the disposal of the Department the substance of the data which he is collecting from various sources.
Supplementing my telegram No. 4 of January 19, 1 p.m., I am enclosing herewith:
- (1)
- A copy in the German original, together with a translation, of the Government’s revised proposal to the International Relief Committee.6 This proposal, I am advised, was submitted by the Austrian Minister Franckenstein in London on Friday or Saturday of last week. I am aware that the substance of it has been communicated to Minister Prochnik, and is very likely already in the Department’s possession. As originally submitted, there was a typographical error. The sentence, “The present value is, reckoned at 5%, in the first case (25 instalments) 402, in the second case (40 instalments) 339 million Schillings” should read, “The present value is, reckoned at 5%, in the first case (25 instalments) 339, in the second case (40 instalments) 402 million Schillings”. Prochnik has, I believe, been advised of this error.
- (2)
- A copy in the German original, together with a translation, of the proposal to the American Government, which was likewise transmitted to Prochnik.7
- (3)
- A copy of the resolution of approval adopted by the Reparations Commission in Paris on the 14th instant.8
If my despatch No. 1664 of the 28th ultimo9 be read in connection with Exhibit 1, it will be appreciated that the revised offer of the Austrian Government to the International Relief Committee is in the nature of a compromise offer. The Austrian Government in its memorandum points out that the suggestion of the International Relief Committee that 1250 million Schillings be paid in 40 annual instalments beginning in 1929 would mean a present value of 402 million Schillings, whereas if 1250 million Schillings were paid in 25 annual instalments beginning 1943 (which Austria would only be obligated [Page 864] to do) it would mean a present value of 339 million Schillings. In other words, if 339 million Schillings were set apart at the present time, it would suffice to fund the Austrian Relief Debt in 25 annual instalments beginning in 1943. The Austrian Government reasons that it should not be penalized for beginning to make advance payments in 1929, and as a counter-proposal, as the Department will perceive from Exhibit 1, it offers to pay 1162.5 million Schillings in 25 annual instalments beginning in 1943, reserving to itself the right to pay from 1929 on the basis indicated. It proposes, however, to adopt the latter alternative and figures that “the present value of these payments amounts in both alternatives to 315 million Schillings”. This 315 million Schillings, it is thought, measurably approximates the 339 million Schillings which the Austrian Government would be obligated to pay from 1943 on the basis of the 1250 million Schilling proposal.
The offer to the American Government, of course, is calculated upon the same basis. Dr. Schüller,10 who is now in Rome for some days, told me on the eve of his departure last week that the revised Austrian proposal is between the Italian debt settlement and the proposed French debt settlement with the United States. The Hungarian and Yugoslav settlements with the United States, he asserts, were for much smaller sums, the Austrian debt being relatively higher.
I have [etc.]
- See paragraphs (2) and (3) of the answer of the Austrian Government to the Relief Bonds Committee, Jan. 14, p. 866.↩
- Post, p. 868.↩
- See paragraph (6) of telegram No. 13, Jan. 14, 7 p.m., from the Chargé in France, p. 859.↩
- Foreign Relations, 1927, vol. i, p. 465.↩
- Dr. Richard Schüller, Sektionschef, Austrian Foreign Office.↩