The Financial Counselor of the Polish Embassy (Zoltowski) to the Adviser on International Economic Affairs (Feis)

No. 52

Dear Dr. Feis: With my letter of January 2nd, 1940,22 I had the pleasure of forwarding to you a final draft of public notice to bondholders of Polish bonds, with regard to the suspension of service of external obligations of Poland, which, owing to the unprovoked war and consequent invasion of Polish territory by German and Soviet-Russian troops, has been forced upon the Polish Government.

At present, I wish to enclose a reprint of the said public notice of January 3rd, 1940, which appeared in The New York Times on January 4th. Please note that, immediately following the text of my Government’s notice, there appears the statement of the Foreign Bondholders Protective Council, Inc. It gives me particular pleasure to tell you that this statement was given by the Foreign Bondholders Protective Council, Inc. in its present form spontaneously, without any negotiations or corrections on my part, showing the deep understanding by the Foreign Bondholders Protective Council, Inc. of the situation in which my country has found itself.

In this connection I gratefully recall the most pleasant relations and cooperation, which—since the first negotiations in 1936 and consequent negotiations in 1937 and 1938—have existed between the Foreign Bondholders Protective Council, Inc. and myself.23

Especially I should like to point out to you that the unreserved assistance extended to me by Messrs. Reuben Clark, Chairman, and Francis White, President of the Foreign Bondholders Protective Council, Inc., aided in a great measure in the readjustment of the Polish foreign indebtedness on what was believed in 1938 to be a permanent basis, fair to the bondholders and the Government alike.24

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Permit me also to express once more to you my thanks for your assistance and cooperation, and with best personal regards, believe me,

Very sincerely yours,

Janusz Zoltowski
  1. Not printed.
  2. For negotiations regarding discrimination against American bondholders in connection with partial defaults and suspensions of payments on various Polish obligations, see Foreign Relations, 1936, Vol. ii, pp. 414 ff.; ibid., 1937, Vol. ii, pp. 535 ff.; and ibid., 1938, Vol. ii, pp. 635 ff.
  3. The Adviser on International Economic Affairs recommended that “In view of the fact that the Polish Government—despite the economic difficulties it faced throughout the whole of the twenties and thirties—maintained full service on its obligations throughout most of this period and then in the debt readjustment gave the dollar bondholders generous consideration, I suggest that it is in order to make a reply of this nature to Mr. Zoltowski.” Such an acknowledgment was sent on February 15, 1940.