863.51 Relief Credits/362a: Telegram
The Secretary of State to the Ambassador in Germany (Wilson)
35. Please deliver the following note to the German Foreign Office.
“In view of the announcement made to the Government of the United States by the Austrian Minister on March 17, 1938,49 my Government is under the necessity for all practical purposes of accepting what he says as a fact and accordingly consideration is being given to the adjustments in its own practices and procedure in various regards which will be necessitated by the change of status of Austria.
In this connection I have to notify the German Government that the Government of the United States will look to it for the discharge of the relief indebtedness of the Government of Austria to the Government of the United States under the Debt Agreement signed May 8, 1930,50 and the Moratorium Agreement signed September 14, 1932,51 between the Government of the United States and the Government of Austria.
This debt was incurred by the Government of Austria for value received through the purchase of flour under the authority of the Act of Congress approved March 30, 1920,52 which authorized the United States Grain Corporation to sell flour on credit to relieve populations in countries of Europe or countries contiguous thereto, suffering for the want of food. It was first represented by an obligation of the Government of Austria dated September 4, 1920, in the amount of $24,055,708.92, which with other obligations of a similar tenor issued at the same time in favor of several other governments was by the express terms thereof a first charge on all the assets and revenues of Austria. On June 9, 1923, the Secretary of the Treasury of the United States, under special authority conferred by joint resolution of Congress approved April 6, 1922,53 subordinated the lien of this obligation upon the assets and revenues of Austria to the lien of the Austrian Reconstruction Loan of 1923, which has since been redeemed, [Page 484] and of the so-called Czechoslovakian Conversion Loan, upon certain revenues of the Government of Austria, On July 2, 1930, the Secretary of the Treasury, under special authority of an Act of Congress approved February 4, 1929,54 subordinated the lien of the Austrian relief bonds held by the United States to the lien of the Austrian Government International Loan of 1930.55 Except as thus subordinated to prior liens pursuant to the Acts of Congress of April 6, 1922 and February 4, 1929, the Austrian relief obligations held by the United States are expressly secured by a first lien on all the assets and revenues of Austria.
In addition to the sums owed this Government from the Austrian Government, consideration is required for the various dollar obligations of Austrian borrowers which are in private hands. The Austrian Government itself borrowed in the American market in 1930, the issue being part of the Austrian Government International Loan of 1930 and being secured by a first charge upon the gross receipts of the Austrian Customs and Tobacco Monopoly, subject at the present time only to the charge on these revenues in respect of the Czechoslovakian Conversion Loan. Furthermore, substantial amounts of bonds publicly issued in the American market by several Austrian political subdivisions and corporations, payable in dollars, are owned by citizens and residents of the United States.
On these dollar bonds in private hands, the Austrian Government and the other Austrian debtors have been making regular payments pursuant to the terms of the obligations. This Government will expect that these obligations will continue to be fully recognized and that service will be continued by the German authorities which have succeeded in control of the means and machinery of payment in Austria. The welfare of numerous American citizens is directly affected and this Government will appreciate prompt assurances on the subject.”
We plan to give text to the press at 1 p.m. Washington time April 6th.
Please repeat to Vienna for information.
- The Austrian Minister informed the Department that Austria had ceased to exist as an independent nation and had been incorporated into the German Reich; see instruction No. 27, March 19, 3 p.m., to the Ambassador in Germany, vol. i, p. 456.↩
- Annual Report of the Secretary of the Treasury on the State of the Finances for the Fiscal Year Ended June 30, 1930 (Washington, Government Printing Office, 1931), p. 316.↩
- Annual Report of the Secretary of the Treasury … 1932, p. 307.↩
- 41 Stat. 548.↩
- 42 Stat. 491.↩
- 45 Stat. 1149.↩
- See Foreign Relations, 1930, vol. i, pp. 391 ff.↩