AUSTRIA NEGOTIATIONS RESPECTING SUBORDINATION OF THE AUSTRIAN RELIEF LOAN TO A PROPOSED NEW AUSTRIAN LOAN-Continued Date and number Subject Page 1928 Feb. 16 (10) From the Minister in Austria (tel.) Information that the Government is beginning to be sharply criticized by the opposition press, that it is known that the United States is the sole remaining obstruction to the negotiations and flotation of loan, and that the Chancellor hopes that early congressional action will be deemed justified by the information now furnished. (Copies of this telegram and No. 9 of February 15 to missions at London, Paris, and Berne.) 879 Feb. 17 (12) Feb. 18 (11) Feb. 21 (15) Mar. 5 Mar. 5 (16) To the Minister in Austria (tel.) 879 Instructions to clarify certain points in telegram No. 9 of February 15; information that the Department is giving immediate consideration to the matter. From the Minister in Austria (tel.) 880 Information as requested in Department's telegram No. 12 of February 17. To the Minister in Austria (tel.) Issuance by Secretary of the Treasury of press statement summarizing Austrian loan situation and announcing that recommendation will be made to Congress for legislation to permit subordination of the American lien; instructions to so advise appropriate officials informally. (Instructions to repeat to London, Paris, and Berne.) Memorandum by the Economic Adviser Disinclination of Morgan & Co. to go ahead with the proposed loan unless suitable arrangements are made regarding European relief creditors' stipulation that their agreement to subordinate lien is dependent upon Austria's agreement to a definite settlement of the relief credits and unless reparation debt is postponed as well as subordinated. To the Minister in Austria (tel.) Instructions to ascertain correctness of report regarding conditional agreement of European relief creditors to subordination of their lien; to inquire status of relief debt negotiations; and to state that U. S. Government expects treatment on an equal footing with the other governments involved. 881 881 882 Mar. 5 (56) To the Ambassador in Great Britain (tel.) 882 Desire for information concerning report that European relief creditors are making subordination of lien conditional upon Austrian agreement to settle relief credits. (Instructions to repeat reply to Legation in Austria.) Proposal for funding of relief debt to all creditor nations, including the United States. From the Austrian Minister Memorandum stating that the Austrian Government does not know of any change in status of case whereby European creditor nations make their agreement to subordination of lien dependent on funding of relief credits and advising that there must be some misapprehension (text printed). 883 884 AUSTRIA NEGOTIATIONS RESPECTING SUBORDINATION OF THE AUSTRIAN RELIEF Loan TO A PROPOSED NEW AUSTRIAN LOAN-Continued Date and number Subject Page 1928 Mar. 7 (12) Mar. 7 From the Minister in Austria (tel.) Understanding in Vienna that subordination of relief bonds lien becomes automatic assuming U. S. Government acts; Foreign Office assurance that the French, Italian, Swiss, and Netherlands Governments have indicated willingness to accept Austrian proposal for settlement of relief debt provided British Government will do the same. Inquiry whether situation might not be fully met by passage of a joint resolution similar to that of April 6, 1922, so that Secretary of Treasury could exercise his discretion in light of action of other interested powers. From the Minister in Austria 885 886 Concurrence in Austrian contention that the other relief credit states cannot now in good faith make a prior relief credit settlement a condition precedent to lien subordination; reiteration of suggestion as to joint resolution. Mar. 9 (46) From the Ambassador in Great Britain (tel.) 887 Mar. 9 (66) Mar. 10 (17) Mar. 10 (58) Mar. 12 (13) Mar. 13 (48) Information that report in Department's telegram No. 56 To the Ambassador in France (tel.) Inquiry whether there have been any recent developments To the Minister in Austria (tel.) Instructions to mention informally to appropriate official the general nature of the report contained in London Embassy's telegram No. 46 of March 9 and to telegraph further comment. To the Ambassador in Great Britain (tel.) Instructions to have frank_talk with Foreign Office regarding meeting of the Control Committee to be held March 15, inquiring whether definite action in authorizing proposed loan is to be conditioned on settlement of relief indebtedness, or whether both propositions may be settled simultaneously. (Instructions to repeat to missions at Paris and Vienna. Information that missions at London, Paris, and Vienna should keep each other mutually informed.) From the Minister in Austria (tel.) Information that the Control Committee advanced their meeting at Geneva to March 8 and approved investment plan set forth in telegram No. 9 of February 15. Plan of Relief Bonds Committee to meet at London on March 30; understanding that governments have given assurances that there is no disposition to force settlement of loan authorization and relief indebtedness simultaneously. From the Ambassador in Great Britain (tel.) Understanding that Relief Bonds Committee will meet on March 30 in effort to reach terms for settlement of European relief debts, the settlement to provide that priority of relief debts over reparations is maintained; observation that approval of Reparation Commission will be required. 887 888 889 890 890 AUSTRIA NEGOTIATIONS RESPECTING SUBORDINATION OF THE AUSTRIAN RELIEF LOAN TO A PROPOSED NEW AUSTRIAN LOAN-Continued Date and number Subject Page 1928 Mar. 13 (49) From the Ambassador in Great Britain (tel.) 891 Report of expectation that meeting of March 30 will accept general terms of last Austrian offer for settlement of European relief debts. Mar. 13 (64) Mar. 14 (65) Mar. 14 (18) Mar. 15 (19) From the Ambassador in France (tel.) Absence of further developments in the fixing of Austrian reparation liabilities; status of the several claims for army costs; impression that European creditors are not likely to stultify their efforts toward rehabilitation of Austria by unduly burdensome reparation or other treaty payments. From the Ambassador in France (tel.) Possibility that if Austria should begin payment on relief bonds account in 1929 in accordance with funding proposal, Italy and perhaps France might raise question of obtaining some payment for army costs in view of priority of army costs over the relief bonds. To the Minister in Austria (tel.) Information that the situation is sufficiently clarified to warrant forwarding to President Coolidge recommendation that he ask Congress to grant to Secretary of the Treasury authority to subordinate lien; authorization to inform Chancellor. To the Minister in Austria (tel.) 891 893 894 894 Instructions to cable the dollar equivalent of the total amount of relief indebtedness of Austria to the creditor governments, including the United States. Mar. 16 (52) From the Ambassador in Great Britain (tel.) 895 Report that the Control Committee met March 8 and raised no objection to proposed Austrian expenditure. Mar. 16 (14) From the Minister in Austria (tel.) 895 Information that total principal amount of Austrian relief indebtedness is equivalent of $119,846,673.80. Mar. 19 Memorandum by the Economic Adviser 896 Mar. 19 (59/R) Mar. 20 Approval by the Secretaries of State and the Treasury of procedure for the drafting of a bill to authorize subordination of the lien and to authorize the latter to conclude a debtfunding agreement with Austria. From the Austrian Minister Assurance that the Austrian Government intends to make an early settlement of the relief debt and will make a settlement with the United States on a basis no less favorable than that made with any of the other relief creditor governments. President Coolidge to the Congress of the United States Recommendation that Congress enact the legislation proposed in enclosed report of the Secretary of the Treasury, dated March 19 (text printed). Instructions to inform the Chancellor of President Coolidge's recommendation to Congress. 237576-42-8 896 897 901 AUSTRIA NEGOTIATIONS RESPECTING SUBORDINATION OF THE AUSTRIAN RELIEF LOAN TO A PROPOSED NEW AUSTRIAN LOAN-Continued Apr. 3 Apr. 7 Apr. 11 Apr. 18 May 21 (128) Observation that it is too early to predict the reaction in Information from the Austrian Minister that at the meeting To the Austrian Minister Assurance that the Department of State will continue its collaboration with the Treasury Department in connection with consideration of the proposed legislation. To the Honorable Willis C. Hawley Importance, from the standpoint of international relations, of early and favorable action on the proposed legislation. Memorandum by the Economic Adviser Telephonic advice to the Austrian Minister that if the proposed legislation were adopted, the Secretary of the Treasury would not have authority to settle with Austria on the basis now under consideration unless Italy should accept similar terms. From the Ambassador in France (tel.) Opinion that draft decision of Reparation Commission concerning Austrian application for exception of certain revenues from first charge under Treaty of St. Germain is satisfactory; inquiry, however, whether reference should be made in preamble to the legislation pending in Congress of the United States. Request for instructions. Page 901 902 902 903 904 905 906 May 22 (143) To the Ambassador in France (tel.) 907 Opinion that there would be no advantage in mentioning the 907 May 28 May 29 (139) May 29 (27) From the Ambassador in France (tel.) Information that the Italian delegation on the Reparation Commission blocked any action on Austrian application, and that further consideration of question has been postponed to next meeting to be held June 23; opinion that the Italian reasons given are only a pretext and that there are other reasons back of their attitude. From the Ambassador in France (tel.) Understanding that the Italian representative on Relief Adjournment of Congress without action on proposed legis lation. 909 909 AUSTRIA NEGOTIATIONS RESPECTING SUBORDINATION OF THE AUSTRIAN RELIEF LOAN TO A PROPOSED NEW AUSTRIAN LOAN-Continued Date and number Subject Page 1928 May 31 (24) June 1 (28) June 2 From the Minister in Austria (tel.) 909 Report of keen disappointment and some despondency in official quarters. 909 To the Minister in Austria (tel.) Authorization to point out that proposed legislation did not get as far as floor of either House owing to the pressure of pending legislation toward close of the session, but that it will be taken up at December session. Memorandum by the Assistant Secretary of State 910 Information that the Italian Ambassador called on June 1 to say officially that Italy feels the arrangement to make a further loan to Austria is not satisfactory. June 4 (25) 910 June 14 June 21 (691) From the Minister in Austria (tel.) Parliamentary declaration by the Chancellor with regard to status of the proposed loan, in which he attributed Italy's attitude in Reparation Commission to the strained relations still existing between the two countries. Memorandum by the Economic Adviser Conversation in which the Austrian Minister advised that he now felt that it would probably be best to conclude a definite debt settlement with the United States, and was told that the matter would be reviewed. (Footnote: Similar expression by the Austrian Minister to the Assistant Secretary of State on June 21.) To the Minister in Austria Desire of U. S. Government to avoid, if possible, sharing with Italy the responsibility for blocking proposed loan; instructions to continue to report any developments of interest which may have a bearing on U. S. course of action. 911 911 July 27 (1798) Aug. 16 Aug. 28 (Similar instructions to missions at Rome, Paris, and London.) From the Ambassador in Italy 912 Information that there has been no change in Italian Memorandum by the Economic Adviser 912 Conversation in which the Austrian Minister stated expectation of an early adjustment of the difficulties with Italy which led to blocking of the loan proposal and inquired whether it would not be better to drop the bill introduced at last session of Congress and submit the definitive terms of a debt settlement; Economic Adviser's reply that Austrian Government should submit full data in support of any proposal it might make. Memorandum by the Assistant Secretary of State Information from the Austrian Minister, in conversation on August 27, that Vienna has word that the Italians will not make any trouble, but that he feels that Congress will not pass on the legislation unless a debt-funding agreement has been made; his inquiry whether Austria should send a debt funding commission. 913 |