Memorandum by the Assistant Secretary of State (Rogers) of a Telephone Conversation With the Hungarian Chargé (De Végh), July 16, 1931

The Hungarian Chargé called me from Newport explaining that he had been unable to reach Mr. Castle1 who was reported engaged at the White House. He said his Government had requested him to use every effort to facilitate the proposed financial support to Hungary from a group of banks; that the arrangement had been left uncompleted and there was acute danger of collapse in Hungary. In response to my question he said that Speyer and the National City were the American bankers involved in the advance. He wanted to know what he could or should do and I understood he was speaking in the presence of his New York Consul who, he said, was thoroughly acquainted with the matter. The Chargé said the Speyer firm had told him the arrangement was suspended pending the developments of the German situation. He said he understood there was a connection between the Federal Reserve Bank and the Government through which we could aid their difficulties. I said that the difficulties were banking matters in which our Government had no authority or proper part; that the Federal Reserve system was independent of the Executive Department, and that we had no authority or control over them and no connection except such exchange of information and contact as was natural for governmental agencies. I made it clear we were unwilling and unable to control or play any part in banking transactions of this sort. I said that I could understand that the German situation had produced an uncertainty regarding all the other financial problems in Europe, but that there was a general spirit of cooperation and mutual helpfulness in financial circles which was very marked, in view of which Hungary would get consideration among the banks.

The Chargé said he would report my comment to his Government but was manifestly disappointed that we took no affirmative attitude.

J[ames] G[rafton] R[ogers]
  1. William R. Castle, Jr., Under Secretary of State.