800.51W89 Rumania/190

Memorandum by the Assistant Economic Adviser (Livesey) of a Conversation With the Rumanian Chargé (Nano) and the Financial Counselor (Boncesco)

Mr. Nano said he had received a note regarding payments due December 15. In fact, however, Rumania had no payments due December 15. I said there was at least the payment due under the Hoover moratorium. Mr. Nano brought out the moratorium agreement and [Page 915] showed me it provided that the first payment was due January 2, 1934. I said that the note had been sent out on the basis of a Treasury request enclosing a table showing payments due by many States, including Rumania. I regretted the mistake in overlooking the fact that the first Rumanian payment was not due until January 2, 1934.

Mr. Nano inquired why the sum stated to be due prior to December 15, 1933, but unpaid, was $1,000,000 whereas Rumania paid $29,061.46 as a token payment in respect of the $1,000,000 sum due June 15, 1933. I said the Rumanian Government having stated that the $29,061.46 was payment in advance of 3% interest on the $1,000,000, the Treasury in preparing a statement of the amount due and payable December 15 had been confronted with the question of mentioning the amounts due prior to December 15 but unpaid and had elected to state the amount as $1,000,000. Mr. Nano said that if the $29,000 were interest paid in advance, and Rumania were to pay the $1,000,000 on December 15, it should have a refund of at least six months of the interest paid in advance. I said that the Treasury naturally had perceived all the elements of the matter but had simply been confronted with the necessity of deciding on some figure to include in its statement. Mr. Nano remarked that the matter seemed rather academic.

Mr. Nano said interrogatively he supposed that a token payment by Rumania would be acceptable to the United States. He had discussed the matter this summer on vacation at Bucharest but the Government had since changed. He must take the matter up with his Government but would hesitate to advise his Government to offer a token payment if it was likely to be rejected by the United States.

I said he knew of the British token payment. Other countries which made token payments in June were again tendering such payments. The Acting Secretary was referring each proposal to the President. There had apparently been some dissatisfaction with tenders small in absolute amount and this had been reflected in newspaper articles. In the circumstances it was very difficult for me to say anything and it would be better if Mr. Nano would see Mr. Phillips.

Mr. Nano said that he could hardly see Mr. Phillips until Monday, the Rumanian Minister is returning to Washington next Thursday or Friday, and he perhaps should leave the whole matter over for the Minister to handle. Mr. Boncesco suggested that he arrange a tentative engagement to see Mr. Phillips Friday, December 8.

Mr. Nano remarked that his Government’s payment due under the moratorium was small ($48,750.08) so that a token payment would naturally be small. In June Rumania had tendered 3% of the amount due and had stated that this was interest in advance at 3% on the unpaid amount due and that Mr. Moley had expressed considerable satisfaction at this form of payment. I said that it seemed to me [Page 916] personally that as Rumania had adopted a formula which seemed to furnish a reasonable, businesslike basis for determining its token payment, his Government might naturally wish to adhere to that basis of payment. I said that of course insofar as I understood these token payments they were all supposed to move from the debtor Governments, the United States Government having no Constitutional authority to alter the existing debt schedules or to say that it accepted the payments.

Mr. Nano finally indicated that he would probably telegraph his Government that a token payment would probably be welcome to the United States Government although it would be necessary to submit the matter to the President before this could be ascertained.

Mr. Nano did not suggest that any action be taken to withdraw or amend our note purporting to inform him of sums due December 15.