The Ambassador in France (Edge) to the Acting Secretary of State
[Received July 17, 1931—8:30 a.m.]
At the request of the American Minister at Budapest the following telegram, which was sent for the Secretary of State, is repeated to the Department:
4 p.m., July 16th. The Hungarian Prime Minister, Count Bethlen, has asked that the substance of a talk which I had with him this morning be transmitted to Mr. Stimson as a personal message from him. This conversation was in substance the following:
“The Hungarian financial situation is desperate. If it is impossible to obtain credits in the next 10 days the collapse of the currency and of the financial machinery of the Government and the failure of numerous banks cannot be avoided. Ten days ago an agreement for a 5 million-pound credit was made with René Charron, representing the B. I. S.,2 the Bank of France, and the Bank of England. The Hungarian Government in turn agreed to undertake a reorganization of its finances on drastic lines. Two and one-half million pounds of the above credit was to come from a group of French banks and from banks in the United States, England, and Hungary. For political reasons the French Government has tied up this credit with the credits to Germany, and up to the present it has refused permission to the French banks concerned to carry out their share of the arrangement. However, the American and English groups involved have let it be known to Count Bethlen that they will take part in the credit only in case the French group joins in. Should the deadlock which has thus been caused continue for a week or 10 days longer it will be too late to save the finances of Hungary. Consequently, Bethlen personally asks Mr. Stimson to point out to Briand the gravity of the Hungarian situation and the importance of not dragging out a decision as to the action to be taken in the case of Hungary as has been done in the German case.”
In reply to this request I said that I would be glad to pass on this personal message to the Secretary of State but that the most I could do would be to lay the matter before him; and I expressed doubt that, under the circumstances, he would be able to do anything about it.
Yesterday, the Hungarian Prime Minister appealed to the French Minister to intervene in behalf of Hungary with his Government.
For the information of Mr. Stimson, I have kept the Department fully informed of the Hungarian crisis, which I hold to be just as serious as it is represented by the Prime Minister. Roosevelt.
It is requested that the above be repeated to the Department.
- Bank for International Settlements.↩