860C.51/1301a: Telegram

The Secretary of State to the Ambassador in Poland (Biddle)

13. Department informed by fiscal agents for stabilization loan that Polish Government is planning, in connection with the handling of the April 15 coupon, to announce its intention of offering the bondholders a permanent adjustment plan which will have the same terms as the permanent plan now extended to the holders of the sterling bonds. If this is true, it will of course be satisfactory in so far as concerns this loan.

However, again according to information from fiscal agents, a minor difficulty was presented by the contemplated handling of the April 15 coupon. It is reported that if the holders of this coupon present it for payment on the due date, April 15, they will receive only 4¼ percent and be called upon to give up rights to the extra ¼ percent. On the other hand, if they postpone presentation of the coupon until the new plan is effective and assented to, they will receive 4½ percent. It seems to the Department that to deprive the holders of this ¼ percent is discriminatory. Would not the Polish Government be willing to agree to pay 4¼ percent on April 15 and the remaining ¼ percent upon the plan becoming effective and assent being given it?