800.51W89 Austria/21

The Ambassador in Great Britain (Mellon) to the Secretary of State

No. 188

Sir: I have the honor to state that the questions regarding the proposed debt postponement agreement between the United States and Austria contained in the Department’s telegram No. 187 of June 29, 6 p.m., were taken up yesterday morning with Mr. Pinsent of the British Treasury, as Sir Frederick Leith-Ross is at present in Lausanne.6 There are enclosed copies of a letter in reply, dated July 1, from Mr. Pinsent to a member of the Embassy staff, together with copies of its enclosures, for transmission to the Treasury.

Respectfully yours,

For the Ambassador:
Ray Atherton

Counselor of Embassy
[Enclosure]

The British Treasury Assistant (Pinsent) to the Second Secretary of the American Embassy (Cox)

F.12505/05/3

Dear Mr. Cox : I have now looked into the position in regard to the repayment by Austria of the amount suspended under President [Page 587] Hoover’s proposal7 in respect of Relief Credits, and I find that it is proposed that the deferred amount shall be spread over a period of 10 years as in the case of the reparation and war debt payments (and not 7 as I thought when I saw you). I enclose a note showing the basis on which the repayment annuities have been calculated, together with a table8 showing the resulting annuities in the case of the creditor countries9 represented on the International Relief Bonds Committee. You will see that apart from differences as to date, (and, in the case of Austria, the payment by annual instalments instead of semi-annual ones), the basis adopted is the same as that adopted for war debt payments.

The Governments represented on the International Relief Bonds Committee have not thought it necessary to arrange for formal agreements covering the suspension of the Relief Debts and the payment of the resulting annuities. A letter, a copy of which I enclose, was addressed by the Committee to the debtor Governments on September 3rd, 1931,10 offering to grant suspension of payments in respect of relief bonds for one year as soon as President Hoover’s proposal had been put into operation. Since then discussions have been going on privately between the Governments. The Committee have now sent a further letter to Austria dated 25th ultimo (of which I also enclose a copy)10 confirming the arrangement subject to identical action being taken by all the creditor Governments concerned, and suggesting that an undertaking to effect payment of these annuities shall be given by means of an endorsement on the existing bonds. Similar letters have been sent to the other debtor governments with the exception of Poland where the matter is held up owing to some difference between Poland and Norway. As is indicated by the terms of this letter, all the Governments represented on the Relief Bonds Committee have agreed to it, subject, in the case of Norway, to the assent of the Storting being obtained. The Norwegian Government are recommending the Storting to agree, and we anticipate that this will be finally settled within a few days and that then arrangements for the endorsement of the bonds can be made.

I don’t know whether your Government will prefer to follow the relatively informal procedure adopted by the other Governments, or to have a formal agreement. In the latter case the agreement [Page 588] between the United States and British Governments of June 4th, 1932, will be a suitable model mutatis mutandis, though I suppose that you will make the operation of your agreement with Austria conditional on similar treatment of her other Relief Creditors.

You may like to know, in order to avoid any misapprehension, that according to the information I have received from Lausanne, the Declaration signed there on June 16th12 refers to War Debts and Reparation only, and definitely does not apply to Relief Debts or to other post-war debts for repatriation of prisoners, etc. Should formal application be made for an extension of the moratorium in respect of Relief Debts, it could not be dealt with, so far as the European creditors are concerned, until a further meeting of the Relief Credits Committee has been held.

I return your volume of Treasury Reports for 1929 with many thanks. I hope I may keep the copy of Mr. Stimson’s telegram for purposes of record.

Yours sincerely,

G. H. S. Pinsent
  1. For correspondence concerning the Lausanne Conference, June 16–July 9, see pp. 636 ff.
  2. For text of the proposal, see telegram No. 262, June 20, 8 p.m. to the Ambassador in France, Foreign Relations, 1931, vol. i, p. 33.
  3. Neither printed.
  4. i. e., Denmark, France, Great Britain, Italy, the Netherlands, Norway, Sweden, and Switzerland.
  5. Not printed.
  6. Not printed.
  7. For text, see Great Britain, Cmd. 4126, Miscellaneous No. 7 (1932): Final Act of the Lausanne Conference, July 9, 1932, p. 2.