863.51 Relief Credits/139
Memorandum by the Economic Adviser (Young)56
The Austrian Minister stated that he was already giving thought to the question of what steps should next be taken in connection with adoption by the United States of legislation making possible the desired loan. He had in the first instance recommended that subordination of the lien and settlement of the debt should not be separated. His Government, however, had not accepted his recommendation on that point. He now felt that it would probably be best for Austria definitely to conclude a debt settlement with the United States. He felt that the difficulty in Congress had resulted from the effort to obtain authority for making a debt settlement the nature of which had not been fully made known. He wondered whether the Government of the United States would be prepared to go ahead with a debt settlement in the near future.
I told the Minister that his suggestion raised a question whether under the terms of the bond one government could make a settlement in advance of action by all the other creditors. I stated that this Government, however, would be glad to review the whole matter carefully with a view to seeing whether any change in procedure would be desirable. I stated that I would discuss the matter in due course with the Treasury and if necessary speak informally to Senator Smoot and Mr. Burton.
- Marginal note by the Assistant Secretary of State reads: “He told me the same thing on June 21. W[illiam] R. C[astle].”↩