863.51 M 82/6

The Minister in Austria (Washburn) to the Secretary of State

No. 1704

Sir: Supplementing and confirming my despatch No. 1692 of the 23rd ultimo, I now have the honor to transmit, in quadruplicate, the following documents:15

(1)
A table showing the public revenues derived from taxes and fees and monopolies for the years 1923, 1924, 1925, 1926 and 1927, according to the reform plan of the League of Nations.
(2)
Five tables showing in more detail by months the aforesaid revenues in accordance with the statements made in the foot-note of Exhibit 1.
(3)
Statement explanatory of the above tables.
(4)
A table showing in detail the current account of federal administration, both as to expenditures and receipts for the year 1927, according to the League Plan.
(5)
Two statements explanatory of the foregoing table.
(6)
Statement giving information regarding the balance in hand of the Austrian Federal Government on December 31, 1927.
(7)
Statement showing the status of the debts of the Republic of Austria affected by the depreciation of the currency.
(8)
Statement showing the application of the League of Nations Loan as of December 31, 1927.

The foregoing tables, it will be perceived, are in millions of Schillings, and comprise the documents transmitted by the Austrian Federal Ministry for Finance to Mr. Weems (referred to in my despatch under reference) for the confidential information of the Morgan firm. Dr. Kienböck, the Federal Minister for Finance, in talking to me stressed the fact that much of the information was confidential, and I promised him that it would be so regarded. He was good enough to supply me with additional copies upon my statement that such copies would be useful for possible distribution among the various interested departments of my government.

Mr. Weems left for New York on Thursday and he came to see me on the eve of his departure. His task here had been, he said, to articulate the various statements and statistical figures submitted to him. Wherever he and his assistant detected a discrepancy, an explanation was asked from the different departments, usually orally. Inasmuch as the major part of the new projected loan was to be expended in railway, telephone and telegraph developments (the two latter branches are under the postal administration), he had concentrated his attention mainly upon the condition of these three public utilities, which are all government owned. Weems told me that he had found the railways and the administration of the posts in a better condition than he had expected. Since he is cautious and not given to optimism, I attach importance to this statement. He has had some training in the railway field, and his conclusions here are entitled to weight. Altogether Weems found a substantial improvement as compared with the general situation when he was here two or three years ago. The agricultural development had been, he thought, quite phenomenal and the banks and government-owned public utilities were in a stronger position. The improvement in the industrial field had been less marked, though even here there were exceptions. The paper industry was more prosperous than it had been before the war, and the Austrian iron and steel [Page 872] industry was doing fairly well, due no doubt largely to its participation in the European cartel.

There is one fact to be kept in mind in passing upon the condition of Austrian public utilities. It is always possible that the Government may have to yield to pressure for higher wages and greater expenditures to such a degree as to throw all estimates out of alignment. There is some reason for the conclusion that the Austrian railway system is no worse off certainly than that of any other Succession State. My own belief is that the government ownership and control of all these systems is a necessary evil. The political obstacles in the way of private leasing even are too great to be overcome, though it is generally recognized that such action would greatly curtail the overhead charges. The Director of Posts, Hocheisel, is a highly trained and efficient bureaucrat of the old school, hard-headed and well equipped to deal with all proposals disturbing his budgetary balance.

I have [etc.]

Albert H. Washburn
  1. Enclosures not printed.