[Enclosure]
The British Treasury Assistant (Pinsent) to
the Second Secretary of the American Embassy (Cox)
F.12505/05/3
[London,] 1 July, 1932.
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,
