462.00R29/155: Telegram
The Ambassador in France (Wallace) to the Secretary of State
Paris, April 5,
1920—6 p.m.
[Received 10:06 p.m.]
[Received 10:06 p.m.]
904. B-7 for Davis. Department’s 665, April 1, 8 p.m., Treasury R-314.
- 1.
- As you know, greater part, if not all of neutral securities owned by Austrian nationals have been pledged or dedicated as security for past food advances to Austria by British, French and Italians, made possible by our $48,000,000 loan to those countries. These neutral securities have been released from that loan on condition that they be used for food [purchases]. It is believed necessary that such neutral securities should be obtained by Austrian Government released from past or contemplated [garbled group] of loans and utilized for food and necessary raw materials in order to keep to minimum advances Austria requires for these purposes and to enable Austria, by use of food and raw material acquired, to commence work and thus provide its [garbled group] with foreign exchange necessary to purchase more food and more raw material when assistance provided by present relief loans is at an end.
- 2.
- Answering your paragraph 3 (a). It may prove necessary, to prevent foreign acquisition of Austrian industries at most inadequate prices [caused?] by Austrian foreign exchange, to exercise authority mentioned your subdivision (a). These assets are security for relief loans. It may prove necessary to have some of these assets requisitioned and sold to obtain food or raw materials not provided by present relief loans. It is essential that present measures be sufficiently broad so that every effort will be possible to make Austria self-supporting and to avoid recurrence of present conditions. The patient is very sick and measures not appropriate in a healthy state may have to be resorted to and may prove efficacious. Considering situation of Austrian Government and its relation to Austrian nationals and as well with new states it is essential to success of any plans to rehabilitate Austria that wide authority be given Austrian Section. I agree that this authority should be carefully exercised and only if and [when found] necessary, (b) I agree with your subdivision (b) but think that Austria should now agree as contemplated by plan. The Austrian Section will no doubt only exercise any rights under such agreement in case of Austrian wilful default or failure to maintain service economically or properly, (c) Do not understand that study of plan commits morally or otherwise anyone to further advances.
- 3.
- Do not understand you require any changes to plan set forth our R-464,26 which changes at this late day and in view of attitude taken by other lending countries might prove awkward.
- 4.
- Rathbone and Logan have seen this cable and agree. Boyden.27
Wallace