800.51W89 Hungary/95
The Acting Secretary of State to the Hungarian Chargé (De Végh)
Sir: Your notes No. 491/Res, dated October 2, 1933, and 617/R, dated December 12, 1933, bringing to the attention of the Government of the United States certain arrangements made by the Hungarian Government in connection with the amounts due on account of its indebtedness [Page 887] to the United States, were duly transmitted to the Treasury Department. I have now received and transmit for the attention of your Government the following communication from the Treasury Department concerning them:
“The Chargé d’Affaires in his note of October 2, 1933, refers to previous correspondence with respect to Hungary’s continued unfavorable economic condition which is causing insurmountable difficulties in procuring the necessary foreign exchange for the service on Hungary’s foreign loans. He also states that the Hungarian Government has issued and deposited to the Foreign Creditors’ Account at the Hungarian National Bank two 4% Hungarian Treasury Certificates, one, No. 17, representing principal and semiannual interest due December 15, 1932, amounting to 233,787 pengös being equivalent to $40,729.35 and the other, No. 77, representing semiannual interest due June 15, 1933, amounting to 135,366 pengös, being equivalent to $28,260.08.
“In his note dated December 12, 1933, the Chargé d’Affaires states that the Hungarian Government will on December 15, 1933, deposit to the Foreign Creditors’ Account at the Hungarian National Bank a Hungarian Treasury Certificate bearing interest at 2% per annum in the pengö equivalent of the dollar amount due on that date to the United States.
“The Hungarian Government points out that the depositing of Treasury certificates in the Foreign Creditors’ Account serves solely as a means of giving security and has no bearing upon the rights of creditors in regard to the amount of their claims.
“The Treasury has taken due note of the Hungarian Government’s action in this respect, but the attention of that Government should be directed to the provisions of its debt funding agreement dated April 25, 1924, and its agreement dated May 27, 1932, under which the amounts payable to the United States from the Hungarian Government are expressed in terms of dollars payable at the Treasury of the United States in Washington or at the Federal Reserve Bank of New York. The Hungarian Government should also be notified that the issuance and deposit of the Hungarian Treasury certificates as above indicated can not in any way alter the provisions of its debt agreements with the United States or prejudice the rights of the United States Government.
“It is noted that the Hungarian Government calculates the amount due to the United States on December 15, 1933, as $114,260.09 instead of $114,628.64 as set forth in the statement communicated to the Hungarian Chargé d’Affaires on November 28, 1933. It should be pointed out to the Hungarian Government that the principal payments due under the agreement of April 25, 1924, bear interest until paid at 3% per annum to December 15, 1933, and thereafter at 3½% per annum. The difference between the Hungarian Government’s figures and the Treasury’s figures, aside from an odd penny, is $368.56, representing interest at 3% on the principal of bonds maturing on December 15, 1932, amounting to $12,285, for which payment has not been received.”
Accept [etc.]