The Latvian Consul General at New York (Lule) to the Secretary of State
[Received November 25.]
Sir: Under instructions from my Government, I have the honor to call your attention to the serious concern of the Government of Latvia, as to the possible effect on the country’s financial and economic situation, of a transfer to the United States Treasury, of the [Page 784]payment due December 15, 1932, of the semi-annual interest in the amount of $102,660, as well as of the payment of a Bond maturing December 15, 1932, in the principal amount of $9,200, which are not postponable under the terms of the debt funding agreement of September 24, 1925, between the Government of the Republic of Latvia and the Government of the United States.
My Government has already been necessitated to take advantage of the provision contained in Article 2 of the funding agreement, in declaring its intention to postpone the principal payment due on the same date, in the amount of $37,000, but feels that the present precariousness of Latvia’s situation as regards foreign exchange reserves, and the continued depressed condition of the country’s export trade, dictate a necessity for further and full relief from its financial obligations under the aforementioned debt funding agreement, during the period of acute crisis,—which is still without noticeable abatement, notwithstanding the emergency measures which have been taken by the Latvian Government, to stem the abnormal outflow of foreign exchange, and to regulate and balance foreign trade. No doubt the United States Government is informed that the Government of the Republic of Latvia, since the beginning of the present crisis, has made drastic cuts in its budget expenditures also, and pursued a policy of strictest economy. It is to be feared lest further steps in this direction will serve only to undermine the vital forces of the country’s financial and economic life.
If the earnest efforts of my Government, have not yet been adequate to overcome the crisis and to cope with the rising difficulties, it is because of reasons deeply rooted in the general World situation, which have obstructed the quick recovery of any single country, and have made it impossible for my country to attain such degree of restoration to normalcy of its finances, as would permit the resumption of its intergovernmental obligations, agreed upon under considerably more favorable circumstances, when the prospect was for uninterrupted progress on the road of recovery.
The Government of the Republic of Latvia has, with satisfaction, noted that the powers principally concerned in the matter of intergovernmental obligations, have taken the initiative in requesting the United States Government to further study the debt question with a view to finding additional remedies to alleviate the present situation. It is to be expected that some period of time would be required to find a satisfactory solution, and until the suggested remedial measures could be enacted. It is the earnest hope of the Government of the Republic of Latvia that, in the meantime, the Government of the United States of America will find it possible [Page 785]to extend the beneficial effects of President Hoover’s announcement of June 20, 1931, by granting a further moratorium for payments due under the debt funding agreement of September 24, 1925.
As of immediate urgency, I have the honor, Sir, to renew the request of my Government for a postponement of the whole amount payable on December 15, 1932, on the principal, as well as on the interest.
I trust that the United States Government will receive this request of the Government of Latvia, in a spirit of high understanding and comprehension of the exigencies of the present situation, and will grant it their favorable consideration.
With assurances [etc.]