863.51 Relief Credits/40
The Austrian Minister (Prochnik) to the Secretary of State
Excellency: As Your Excellency are aware of, the Austrian Government had resolved to settle the country’s relief debts and for this purpose entered into negotiations with the pertaining Creditor States in Europe.
Austria assumes the obligation of paying in 25 equal annuities, beginning from the year 1943, a total of 1,162,500,000 Austrian schillings (to all Creditor States incl. the United States) and reserves the right to commence payments on January 1st, 1929, on the following scale:
| from | 1929–1933, | 5 | annuities | à | 10,000,000 | S | = | 50,000,000 |
| “ | 1934–1943, | 10 | “ | à | 16,000,000 | S | = | 160,000,000 |
| “ | 1944–1968, | 25 | “ | à | 25,840,000 | S | = | 646,000,000 |
| 856,000,000 |
Corresponding to the above scale my Government offers to fund Austria’s relief debt to the United States on the following plan:
| 5 | annuities | (1929–1933) | of | $284,000 | each | = | $ 1,420,000 |
| 10 | “ | (1934–1943) | of | $455,000 | “ | = | $ 4,550,000 |
| 24 | “ | (1944–1967) | of | $735,000 | “ | = | $17,640,000 |
| 1 | annuity | (1968) | of | $729,000 | “ | = | $729,000 |
| total | $24,344,000 |
I have the honor to solicit on behalf of my Government Your Excellency’s kind intermediary in recommending with the least possible delay acceptance by your Government and Congress of a settlement as outlined before.
[Page 884]In support of my petition I beg to point out the fact, that our offer, as it stands now, already is based on terms less favorable for us than those granted by the United States to other debtors (less favorable even than the terms accorded to Italy). Prompted by a desire of offering to the United States no lesser terms of settlement than those we had to propose to our European relief creditors we already have deprived ourselves of the benefit of the policy adopted by your Government in regard to debt settlements, i. e. a funding based on the debtor’s paying capacity.
Austria, although one of the poorest debtors of the United States, will, under the funding plan offered by her, be among the less favored debtor nations, as her offer provides for a total payment, which, reduced to its present value (at 5% interest), would represent 37% of her entire indebtedness to the United States. Still more unfavorable would be her position as compared with that of the other debtors of the United States if Your Excellency’s Government should decide to strictly adhere to their indisputable right of accepting no lesser terms than those Austria will have to grant to her other creditors and in view thereof would refuse to consider our proposal prior to a conclusion of our negotiations with our other creditors; with other words, if Your Excellency’s Government should resolve to strictly conform their final decision to the outcome of our negotiations in Europe.
Your Excellency would greatly oblige me by obtaining and communicating to me at your earliest possible convenience a statement by your Government as to their attitude towards the funding proposal submitted by this Legation.
Accept [etc.]