800.51W89 Belgium/207: Telegram
The Ambassador in Belgium (Gibson) to the Secretary of State
[Received December 9—12:08 p.m.]
86. I am submitting the following observations in connection with the second Belgian debt note as to [of?] possible interest to the Department in preparing its reply and not as support for the Belgian plea.
The financial condition here in so far as the Government is concerned is unsatisfactory as stated in their note and there is only slight prospect of improvement. The last several cabinets have had recourse to borrowing funds to meet budget deficits and now about 3 billion francs or one-third of the total budget is being borrowed annually to balance revenues with expenditures.
About one-half of this money is being obtained within the country and one-half abroad. The average rate of interest is 7 percent a surprisingly high figure for one of the few countries still on the gold standard.
Retrenchment in Government expenditures has begun and will undoubtedly be carried further; taxes have been increased and the Government is tightening up on certain leakages which are familiar phenomena in Latin countries.
Neither the present Cabinet nor the late Renkin Cabinet has dared to present Parliament with a budget for the forthcoming year.
For more detailed account of the Belgian financial situation see the Embassy’s despatches numbers 1089, 1121, 1124, 1129, 1138, and 1142.62
Business conditions throughout the country are similar to those in our own country although unemployment figures are only about half as high in proportion to the population as in the United States. There are one or two encouraging signs on the horizon; for example, foreign [Page 708] trade cooperation with Holland and the Scandinavian countries and the fact that for the last 3 months the National Railways have shown a slight operating profit.
- None printed.↩