The Chargé in Estonia (Carlson) to the Secretary of State
[Received February 9.]
Sir: I have the honor to refer to the Department’s instruction to the Tallinn Legation dated June 17, 1936, (No. 60)3 and to previous correspondence between the Department and the Tallinn Legation regarding the failure of Estonia to make payments on its indebtedness to the United States under the United States-Estonian debt funding agreement of October 28, 1925.4
At the same time reference is likewise made to the Legation’s despatch No. 89 (Diplomatic) of January 12, 1937,5 reporting a conversation between the writer and General Johan Laidoner, the Commander in Chief of the Estonian Armed Forces. In the foregoing despatch General Laidoner was reported as having said that there was no reason for Estonia to be concerned about the negative status of Estonia’s commodity exchanges with the United States, since, in his opinion, an excess of imports from the United States might eventually be given consideration in the settlement of Estonia’s outstanding debt obligation to that country.[Page 848]
The writer was very much interested to hear views on the foregoing subject of practically the same kind as those of General Laidoner expressed in a conversation which he had recently with Mr. Nicolai Kaasik, the Director of the Political Bureau of the Estonian Foreign Office.
Mr. Kaasik intimated that the question of Estonia’s debt to the United States had been discussed by the Estonian Government not long ago. He said that in this discussion there had been sentiment favoring the resumption of negotiations with the United States Government on the foregoing subject. It had been pointed out that Estonia’s finances were now in a better position and that Estonia might possibly be in a position to make a debt settlement proposal of some kind to the United States. The opinion had, however, been expressed that in the negotiations Estonia must take the standpoint that it had already paid a large part of its debt to the United States through Estonia’s excess of imports from the United States over a long period of years.
Mr. Kaasik said that the question of Estonia’s debt to the United States had been postponed for the time being because of the present unfavorable European political and economic situations. It was his belief, however, that the subject would again be taken up by the Estonian Government in the not too distant future.
The writer told Mr. Kaasik that he was not in a position to make any comments on the subject of Estonia’s debt payments to the United States, other than that he felt certain that the resumption by Estonia of payments under the terms of the United States-Estonian debt funding agreement would unquestionably be welcomed by the Government of the United States.