811.516 Export-Import Bank/7–1747: Telegram
The Secretary of State to the Legation in Hungary
820. Board Directors Eximbank Jul 31 considered cotton credit (urtels 1195 Jul 17 and 1197 Jul 161) and decided to cancel credit for following reasons (1) at time credit negotiated Hungarian Govt was under nominal control non-Communist Smallholders Parity. Subsequent political coup changed complexion Govt and also resulted in exile Hungarians who negotiated credit. While voluntary exile these persons does not destroy legal validity agreement signed Apr 30 1947 Board Eximbank originally approved credit partly because it had confidence in Hungarian negotiators who would also have administered credit once it was in operation (2) the two Hungarian banks to which credit extended are under threat nationalization and (3) info given Eximbank at time credit negotiated regarding available supply sufficiently at variance with info contained urtel 1195 to warrant reconsideration credit.
Since inquiry about status credit was raised in Budapest Bank and Dept opinion that you should inform Govt regarding cancellation.
Dept and Bank considering publicity and request your comments regarding appropriate time and procedure to be followed.