The Secretary of State to the Latvian Consul General at New York (Lule)
Sir: By your note of December 15, 1932,17a I have learned with satisfaction of the payment by your Government to the order of the Treasury of the United States of the sum due December 15 under the Debt Funding Agreement of September 24, 1925. However, in view of the statement in your note that “the Government of the Republic of Latvia do not regard this payment as a resumption of payments under the Debt Funding Agreement of September 24, 1925”, I must call attention to the fact that the Secretary of the Treasury has no authority to accept payment from your Government except as provided under the terms of the Debt Funding Agreement.
There is reserved to the Congress of the United States the ultimate decision in respect of the funding, refunding or amendment of these intergovernmental obligations under consideration. The Executive has no power to amend or to alter them either directly or by implied [Page 790]commitment. Accordingly, it should be understood that acceptance by the Secretary of the Treasury of funds tendered in payment of the December 15 installment cannot constitute approval of or agreement to any condition or declaration of policy inconsistent with the terms of the agreement. The sum so received must be credited to principal and interest as provided therein.
I note the request of the Government of Latvia that a full survey of the matter of Latvia’s indebtedness to the United States be made, and that a revision of the Debt Funding Agreement of September 24, 1925, take place before the next payment date. The President of the United States is disposed, through whatever agency may seem appropriate, in cooperation with the Latvian Government, to survey the entire situation. Such an examination does not imply cancellation but I believe that there are important avenues of mutual advantage which should be thoroughly explored. At an opportune time I shall communicate further with your Government in this regard.
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