Memorandum by the Under Secretary of State (Castle)
The Austrian Minister telephoned me that he had received a telegram from his Government saying that instructions had been sent him about the signing of the moratorium agreement. The Minister said that he would report to the Treasury just as soon as he received his instructions. He said that on two points his Government had to make reservations, one was that in the past the Austrian Government was permitted to make payments through the deposit of United States Government bonds and that this permission was apparently abrogated in the new agreement. The second and more important was that the Austrian Government had signed the agreements in London for 3% interest and could not grant the 4% in interest because this would automatically mean they must give 4% everywhere else.
I did not discuss the matter with the Minister over the telephone, but merely told him I was surprised at this proviso, as it had been understood in London that the 3% was only tentative.
The Minister asked me to pass on the information that he was getting his instructions to the Treasury.