800.51W89 Estonia/92

The Chargé in Estonia (Carlson) to the Secretary of State

No. 158 (Diplomatic)

Sir: I have the honor to refer to despatch No. 140 (Diplomatic) from this Legation, dated September 7, 1932,66 in which it was reported that the Estonian Government intended to make application for postponement of its payment not only of the principal but also of the interest due on the funded indebtedness of Estonia to the United States payable on December 15, 1932 under the terms of the Debt-Funding Agreement of October 28, 192567 between the two countries.

On September 16, 1932, it was reported in the Estonian press that Secretary Mills of the United States Treasury had announced the receipt of requests from Estonia, Latvia and Poland for the postponement for two years of the principal payment due on December 15, 1932,68 from those countries under their respective debt funding agreements with the United States. The press comments on this announcement were limited to brief statements concerning the status of Estonia’s funded indebtedness to the United States, in which it was pointed out that the sum of $111,000 representing principal due on December 15 made up a relatively small amount of the total payable to the United States on that date, since the interest charges then due amount to $245,370. The press reports also stated that Estonia intended to make a special request of the United States, outside the terms of the debt funding agreement, for a similar postponement of the interest charges due on December 15, 1932, although it was not known whether such a request would be granted. It was also pointed out that postponement of the combined principal and interest payments due on December 15 would reduce the Government budget by about 1,200,000 Kroons, which represents about ¼ of the currently foreseen budget deficit for the fiscal year ending March 31, 1933.

In connection with the press reports mentioned above, the Legation had occasion to mention this subject, among other matters, to Mr. Laretei of the Estonian Foreign Office, on September 17, 1932. He said that Estonia expected to delay its request for postponement of the interest charges due on December 15, until after the United States [Page 720] presidential elections in November. He added that although the Estonian Government realized perfectly that its proposed request for such a postponement lay entirely outside the terms of the debt-funding agreement, Estonia nevertheless had some hope that such a request might receive favorable consideration; one reason for such hope lay in the leniency shown by the United States Treasury to Great Britain in allowing the latter to delay until after the date set in its debt-funding agreement its decision on requesting a postponement of its debt to the United States payable on December 15, 1932.

As of possible interest in connection with the present despatch there is enclosed herewith an article which appeared in the Tallinn newspaper Päevaleht on September 16, 1932,69 reporting the announcement of the United States Treasury, mentioned above, and setting forth the status of Estonia’s funded indebtedness to the United States.

Respectfully yours,

H. E. Carlson
  1. Not printed.
  2. Combined Annual Reports of the World War Foreign Debt Commission. 1922–1926, pp. 208–213.
  3. For text of press release issued by the Treasury Department, September 15, 1932, see U. S. Treasury Department, Annual Report of the Secretary of the Treasury, 1932, p. 308.
  4. Not reprinted.