Papers relating to the foreign relations of the United States, 1930, Volume I

863.51 Relief Credits/207

The Austrian Minister (Prochnik) to the Acting Secretary of State

Washington, March 31, 1930.

No. 47/R

Sir: At the instance of the Federal Government of the Republic of Austria I have the honor to ask your kind intermediary with a view of bringing the following communication to the attention of the Secretary of the Treasury.

With Public Resolution No. 81 dated February 4th 1929,⁹ the Secretary of the Treasury is authorized, if he determines that substantially similar action has been taken by each of the Governments of Denmark, France, Great Britain, Italy, the Netherlands, Norway, Sweden and Switzerland in respect of the Austrian relief bonds held by them and that the Reparation Commission has given an appropriate release in respect to such loan, to subordinate the lien of the United States upon the assets and revenues of Austria for the payment of the Austrian relief bond held by the United States (but without prejudicing the priority over costs of reparation stipulated in the relief bond) to a lien upon such assets and revenues as may be pledged for the payment of one or more loans floated by Austria in an aggregate net amount of not more than 725,000,000 Austrian Schillings and for a period of not more than thirty years from July 1st 1929.

The Relief Bond Committee representing the Governments of the aforementioned countries expressed with note ddo December 12th 1927¹⁰ their consent in principle to the release from the prior charge in favor of the Relief Bonds, for the period of the new loan, not exceeding 30 years, of such securities as may be necessary for said loan provided that

1.) similar consent is obtained from any other Powers interested as holders of Austrian Relief Bonds;

2.) consent is also obtained from the Reparation Commission for the release of the securities in question from the charge for reparation and other Treaty Costs;

3.) the specific securities which it is desired to release, are in due course, submitted to the Chairman of the Relief Bond Committee who is authorized to approve them.

The first proviso referring to the United States of America was taken care of by the aforecited Public Resolution.

To satisfy the second proviso, although after coming into force of the Hague Convention of January 20th 1930, it will become obsolete, the Austrian Government has taken the necessary steps to obtain formal consent of the Reparation Commission.

It is now in respect to the third proviso that the Federal Government of the Republic of Austria by this present notifies the Government of the United States of America that it intends to pledge for the new Investment Loan the following resources, to wit:

1.) the revenues of the customs;

2.) the gross receipts of the Tobacco Monopoly;

3.) such parts of the other revenues and receipts of the Federal Government of Austria which for the full protection of the new loan may be considered necessary as a supplement in case the two previously referred to sources of income should be considered insufficient.

For further explanation my Government wishes to state, that it considers the probability of resorting to the additional securities mentioned on the third place very remote, nay almost out of question, as the receipts from customs and tobacco monopoly are four times the amount needed to take care of the service of the League of Nations-Loan and will be thrice the amount required for covering interest and sinking fund on both loans (the League of Nations-Loan and the new Investment Loan).

In view of the fact, however, that the new Investment Loan, unlike the first one, will not be vouched by an international guaranty, it seems inadvisable to my Government to strengthen this unavoidable discrepancy in the value of these two loans by restricting beforehand the volume of securities accessible for the new Investment Loan.

The Federal Government of Austria requests, therefore, the Government of the United States of America to consent to the release from the prior charge in favor of the Relief Bonds, of the custom-revenues, the gross receipts of the tobacco monopoly and of such other revenues and receipts of the Federal Government of Austria as may in future and under certain circumstances be required to cover the service.

A similar request was submitted to Sir Frederick Leith Roth [Ross] Chairman of the International Relief Bonds Committee by the Minister of the Austrian Republic in London.

Accept [etc.]

Edgar Prochnik

9. 45 Stat. 1149.
10. Foreign Relations, 1927, vol. i, p. 470.