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The ratifications shall be exchanged at Washington as soon as possible, and the treaty shall take effect on the date of the exchange of the ratifications. It shall thereafter remain in force continuously unless and until terminated by one year's written notice given by either High Contracting Party to the other.

In faith whereof the respective Plenipotentiaries have signed this treaty in duplicate in the English and Albanian languages, the English text to have authority in case of conflict between the two texts, and hereunto affixed their seals.

Done at Washington the twenty-second day of October, in the year one thousand nine hundred and twenty-eight.

FRANK B. KELLOGG (SEAL]
FAÏK KONITZA

(SEAL]

AUSTRIA

NEGOTIATIONS RESPECTING SUBORDINATION OF THE AUSTRIAN RELIEF LOAN TO A PROPOSED NEW AUSTRIAN LOAN; ' AUTHORIZATION OF A DEBT AGREEMENT

863.51 Relief Credits/9

The Economic Adviser (Young) to the Secretary of State

[WASHINGTON,] December 29, 1927. MR. SECRETARY: The New York Journal of Commerce of December 23 stated that "failure of Washington to approve the protocols under which the new Austrian $100,000,000 international reconstruction loan is to be issued is holding up the flotation of the bonds."

Since it is possible that similar statements may be made in other papers, the following brief summary of the situation is furnished for your information:

The Austrian Government desires to float a loan of $100,000,000 for continuing the program of reconstruction by means of railway construction and other public works. The project has received the approval of the Committee of the States which guaranteed the international Austrian loan floated in 1923. Under the Lodge Resolution, the Secretary of the Treasury extended until 1943 the maturity of the $25,000,000 relief bond representing advances made immediately after the war. He also raised the liens which that bond enjoys to the extent necessary to permit the reconstruction loan of 1923.

Several weeks ago the Austrian Government asked the United States to extend the maturity of the relief bond until 1957 and also to release the liens in favor of the proposed new loan. The Secretary of the Treasury submitted to the Attorney General the question of his authority, and the ruling was that no further authority to act remained under the terms of the Lodge Resolution. The Austrian Government was so informed.

The Austrian Government has now proposed in principle to make an agreement for payment of the relief bond in 25 years beginning 1943. A similar proposal has been made to the other creditor governments. It is now learned informally that the International Relief Bonds Committee is at the present time meeting in London. At the invitation of that Committee, this Government at one time had ar

Continued from Foreign Relations, 1927, vol. I, pp. 442-475. ' Ibid., 1922, vol. I, p. 618; also 42 Stat. 491.

858

ranged for a secretary of the Embassy at London to attend its meetings to keep the Department informed. We have not, however, been invited to participate in the present meetings.

The most recent Austrian proposal is being referred to the Treasury for comment.

In case any question is raised by the press, it might be well to state that it is not correct to say that the United States is holding up the matter. You could say that you understand Austria desires a loan of $100,000,000; that the matter is very complicated because of the liens of the relief bonds and the provisions of the treaty regarding Austrian reparations (whose amount has not been fixed); that various plans have been discussed for arranging the loan; and that you have not been advised that the other governments have accepted any particular plan covering these matters, and that the Department has not been informed that the Reparation Commission has taken any action in the matter with reference to the reparation claim against Austria.

It is my opinion that it would be desirable now to make a proper agreement covering the relief indebtedness of Austria. I should also like to see an arrangement made whereby the Executive Branch of our Government would not have to continue protecting liens which affect Austrian assets and revenues, since we have no interest in the situation which warrants maintaining such a degree of control over Austrian finances. Our position would be the more embarrassing if the other Governments should be willing to take action to facilitate a further reconstruction loan by Austria, but the Executive of the United States lacked authority to do so. I think we should have in mind this possibility, although I see nothing specific to be done until the situation develops further.

We have not had any inquiries from bankers as to our attitude on the proposed loan, which obviously is only at the preliminary stage, though J. P. Morgan and Company have indicated that they are interested in it.

A[RTHUR] N. Y[OUNG]

462.00 R 29/4221 : Telegram

The Chargé in France (Whitehouse) to the Secretary of State

[Extract]

PARIS, January 14, 1928–7 p.m.

[Received January 15—2:30 p. m.] 13. Reparation 72. At Reparation Commission meeting today: (4) Commission took note of the issue of Austrian renewal bonds

) to replace the relief bonds of 1920.

(5) Took note of the amounts fixed in the restitution agreements concluded between the Austrian and certain Allied governments but declared that in so doing, having regard to the terms of the Austrian relief bonds, its decision must not imply an invitation to the Austrian Government to discharge these liabilities save by preliminary agreement with the governments holding relief bonds. Reservations, however, were made by various delegations which would have the effect of authorizing in fact certain payments under the restitution agreements

. I entered a reserve as to the position of the United States toward these reservations. The Commission finally decided to communicate its decision to the Austrian Government and the relief bond holding countries, with the suggestion that they reach agreement as to the payments covered by the reservations. The payments involved are not of considerable importance.

(6) As regards the proposed new Austrian loan, the Commission decided that “It will be willing, in principle and to the extent which it may deem necessary, to ensure the service of the loan to give favorable consideration to an application from the Austrian Government for an exception in favor of the said contemplated loan under Article 197 of the Treaty of St. Germain of such revenues of Austria as may hereafter be approved by Reparation Commission from the first charge for treaty obligations created by that article.” In these matters I found it advisable to make a statement based on the first part of paragraph two of the Department's Reparation 37.*

(8) Date [of] next meeting February 18.

WHITEHOUSE

863.51 Relief Credits/12

The Austrian Minister (Prochnik) to the Secretary of State No. 7

WASHINGTON, January 16, 1928. EXCELLENCY: Pursuing my previous notes and verbal discussions in matters relating to the intended Austrian investment-loan and its chief rerequisite [sic] i. e. deferment of lien held by various States for relief credits, I have the honor to notify Your Excellency that the Reparations Commission as well as all the other creditor countries (with the exception of the United States) have, as I just was advised by my Government, deferred their lien for & period of 30 years beginning from the issue of the new loan.

'Malloy, Treaties, 1910–1923, vol. III, pp. 3149, 3216. * Not printed; it stated that an enabling act of Congress would be necessary to effect the actions requested regarding the suspension of the lien and the postpone ment of the payments due for the relief credit bond. (File No. 863.51 Relief Credits/5.)

At the same time negotiations are pending for the settlement (funding) of the relief credits on a proposed scale which I have communicated to the economic adviser of the State Department, Mr. Young, for further consideration by Your Excellency's Government.

Negotiations for the loan could now proceed without further obstruction, if the Government of the United States, with authorization by Congress, would likewise defer their lien for a period of 30 years beginning from the issue of the said loan.

I just received a cable from my Government instructing me to petition Your Excellency's Government to recommend to Congress with a least possible delay a bill authorizing the above mentioned deferment.

Your Excellency will readily see that a debt settlement by itself is a matter requiring considerable time for its finalization and being apt to meet with various causes of delay, the more so if, like in our case, an agreement on one and the same base is to be reached with a number of different countries.

My Government would, therefore, appreciate a technically separated treatment of these two questions (deferment of lien and debt settlement), although materially there may exist some relations between them.

Another difficulty in obtaining a timely solution in the case of deferment of lien by the United States lies in the necessity of parliamentary action. The failure of securing such an act by Congress before its adjournment would spell doom for the investment loan intended by the Austrian Federal Government to be used for a general improvement of the whole economic conditions of the Country.

Submitting the aforementioned request of my Government to Your Excellency's favorable consideration I have the honor to ask for a notification at the earliest possible convenience as to Your Government's intentions in regard to the same. Accept [etc.]

EDGAR PROCHNIK

863.51 M 82/4: Telegram

The Minister in Austria (Washburn) to the Secretary of State

[Paraphrase)

VIENNA, January 19, 1928-1 p. m.

[Received 3:34 p. m.] 4. Referring to the Department's No. 633, January 5.5 The Austrian Minister at Washington has apparently reported that obstacles

Not printed. A letter dated Dec. 29, 1927, from R. C. Leffingwell of J. P. Morgan and Company, regarding discussions in progress between the Austrian Government and the European Relief Creditor States, was enclosed; see Foreign Relations, 1927, vol. I, p. 473.

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