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lings per annum, i. e., a total of 1,000,000,000 schillings; the Austrian Government reserving the right, however, at its option, to anticipate these payments in part by paying for five years from 1929 10,000,000 schillings per annum, during the next ten years 15,000,000 per annum, the sums so paid, with 8% compound interest until 1943, to be deducted from the total of 1,000,000,000 schillings. If prepayments as outlined above to the aggregate of 200,000,000 schillings were made prior to 1943, the Government would then have to pay only 26,250,000 a year for 25 years from 1943.

Very truly yours,


863.51 Relief Credits/4

The Secretary of State to the Secretary of the Treasury (Mellon)

WASHINGTON, January 7, 1928.

SIR: With reference to this Department's letter of December 23, 1927, regarding the Austrian relief indebtedness to the United States and the proposed flotation of a new Austrian loan, I have the honor to transmit for your consideration a copy of note No. 2531/70, dated December 28, 1927, from the Austrian Minister at Washington.

You will note that the Austrian Minister requests that there be recommended to Congress appropriate legislation authorizing the postponement of the relief credit lien for a period of thirty years from the date of issue of the contemplated new Austrian loan. The Minister also requests an early reply to his previous inquiry whether the Government of the United States is willing to enter into negotiations for a settlement of Austria's relief debt along the lines indicated in his note No. 2423/70 of December 6, 1927.

I also transmit herewith a copy of a letter, dated December 29, 1927, from Mr. R. C. Leffingwell of J. P. Morgan and Company, regarding discussions in progress between the Austrian Government and the European Relief Creditor States. This letter gives further information as to the nature of the arrangement which the Austrian Government appears to contemplate. The first paragraph of Mr. Leffingwell's letter indicates that the United States may be invited to keep in touch with the discussions understood to be proceeding at London.

The Department will be glad to have your reply to its letter of December 23 and the present letter at your earliest convenience. I suggest that, if you concur, this Department now inform the Austrian Minister in the sense indicated in the Department's letter of December 23, pointing out that the consideration by this Government of the

proposal to defer the lien would be facilitated by the receipt of more specific information as to the proposal for funding the relief debt, since this Government would like to consider both subjects at the same time.

I have [etc.]

For the Secretary of State:

Assistant Secretary



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

No. 1477

VIENNA, July 23, 1927. [Received August 8.] SIR: I deem it proper to acquaint the Department with the fact that early in the current week I took occasion, in alluding to the deplorable incidents arising out of the recent rioting in the City of Vienna, to express to the Chancellor the sympathy of the Government of the United States and to congratulate the Austrian Government upon its success in speedily restoring order. Similar statements, I have the honor to report, were made by most of my colleagues in the name of their respective governments and I assumed that such action on my part would meet with the approval of the Department.

In common with other Legations, I have also the honor to state, I received a formal notice from the President of Police of the interment on Thursday of the police officers killed in line of duty during the insurrectionary outbreak. Specific inquiries came from several of my colleagues, notably from the English and Italian Legations, as to whether I intended to be present at the obsequies. This decision was not so easy to make. I felt that the Government of the United States has special reason to be grateful to the Police Direction for so assiduously guarding American officials here in Vienna on account of the Sacco-Vanzetti incident-I have voiced my personal gratitude on several occasions. Nevertheless, the notice or invitation did not emanate from the Federal Government and it seemed to me that the presence of foreign diplomats might be construed as undue meddling in an internal matter. This, I ascertained upon talking with him, was also the view of the Belgian Minister, Le Ghait, the Dean of the Corps. The Italian Minister was especially anxious to know my final decision-perhaps because it is generally

recognized, I think, that my relations with Police President Schober are extremely cordial. I may possibly be exceptional-I do not know-in having been able to see him at all times during the recent trouble. In any event, I got the impression that had the American Legation been represented, the Italian Legation would have been also. If the representatives of Republican America and Fascist Italy had been conspicuous by their attendance, I can imagine the comment of the radical press. My decision was mainly influenced however by the circumstance that the Federal Government itself neither expressly nor impliedly intimated its desire in the matter.

The foregoing is submitted for the Department's information and possible comment.

I have [etc.]



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

No. 609

WASHINGTON, August 15, 1927. SIR: The Department has received your Number 1477, of July 23, 1927, stating that you have congratulated the Austrian Government upon its success in restoring order after the recent riots in Vienna, and that you received formal notice from the President of Police of the date on which interment of the police officers killed in the outbreak would be made but, after consultation with some of your colleagues, did not attend the obsequies.

In reply you are informed that your action, as stated above, is approved. I am [etc.] W. R. CASTLE, Jr.




The Secretary of State to the Minister in Bolivia (Cottrell)

No. 308

WASHINGTON, August 19, 1927. SIR: This Government has, as you are aware, entered upon the policy of negotiating with other countries general treaties of friendship, commerce and consular rights, of which the central principle in respect of commerce is an unconditional most-favored-nation clause governing customs and related matters.1 This policy was inaugurated pursuant to the principles underlying Section 317 of the Tariff Act of 1922; 2 it seeks assurances that equality of treatment for American commerce will be maintained in all countries.

Besides the provisions relating to commerce, these treaties include provisions relating to rights of nationals of each country in the other country, to protection of property and to rights and immunities of consuls. This Government now desires to enter into such a treaty with Bolivia.

The first treaty to become effective expressing the present policy of this Government was the Treaty of Friendship, Commerce and Consular Rights with Germany, signed December 8, 1923; ratifications of which were exchanged October 14, 1925. Similar treaties have been signed by the United States with Hungary, Esthonia and Salvador, of which those with Esthonia and with Hungary have been brought into force by exchange of ratifications.

A treaty containing the unconditional most-favored-nation clause was signed with Turkey on August 6, 1923. About a dozen other treaties containing such a clause are in process of negotiation. Modi vivendi based upon the same principle, entered into with the following countries, are in force-Brazil, Czechoslovakia, Dominican Republic, Finland, Greece, Guatemala, Haiti, Latvia, Lithuania, Nicaragua, Poland (including Danzig), Rumania and Turkey.

1 See Foreign Relations, 1923, vol. 1, pp. 121 ff.

42 Stat. 858, 944.

8 For treaties and modi vivendi hereafter referred to in this instruction and not cited therein, see footnotes to instruction No. 1162, Aug. 21, 1926, to the Ambassador in Brazil, Foreign Relations, 1926, vol. 1, p. 569.

Two copies of the treaty of December 8, 1923, with Germany are enclosed. You are requested, unless you perceive objection, to inquire whether it would be agreeable to the Government of Bolivia to proceed to the negotiation with the United States of a similar treaty. A special draft of treaty will, of course, be prepared for presentation to Bolivia if this proposal is acceptable to the Bolivian Government. That certain departures from the text of the German treaty should be made is probable, but the views of both countries in respect of this matter may appropriately be exchanged during the course of negotiations.

It would be gratifying if, among its early treaties embodying this principle, the United States could celebrate a general commercial treaty with Bolivia. Such treaty would supersede the Treaty of Peace, Friendship, Commerce and Navigation which was concluded by the two countries on May 13, 1858.5 You should in this connection keep particularly in mind that a most-favored-nation clause with a condition such as that contained in Article II of the Treaty of 1858 would not now be acceptable to this Government.

For your confidential information, though the Department, in proposing a treaty with Bolivia, is influenced chiefly by its policy of concluding with other countries generally treaties containing the unconditional most-favored-nation clause, you are nevertheless desired to use especial diligence in seeking a favorable response from the Bolivian Government, thus forestalling any efforts that other countries may be planning to make for the purpose of interposing in South American arrangements based upon special privilege-a policy wholly antagonistic to the policy of equality of treatment which the United States is undertaking to promote. You may recall in this connection that in 1923 this Government renounced the preferential customs treatment which certain American products had been receiving in Brazil and requested instead a pledge of equal footing with other countries in the Brazilian market.®

For your further confidential information and guidance, it was some time ago suggested to the Department that there was a movement on the part of Spain to seek from the countries of Latin America special commercial concessions in return for certain advantages to be accorded to their commerce in Spain. In this connection see the Department's circular instruction dated April 19, 1926.7

The Department either has transmitted or expects at an early date to transmit instructions similar to the present instruction to the Amer

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