Office of the Historian

800.51 W 89 Hungary/23: Telegram

The Ambassador in France (Herrick) to the Secretary of State

Paris, May 14, 1924—5 p.m.
[Received 9:12 p.m.]
263. L–164.
1.
Reference Department’s L–68 April 29 concerning refunding of Hungarian relief bond and subordination of its priority in favor of reconstruction loan. Am advised that Hungarians are now in London negotiating for loan and that Governor of Bank of England is now favorable thereto. Nothing in the nature of actual contracts can be consummated with the banking interests until the status of the American relief bond is ascertained. For this reason am requested ask you whether Congress has yet taken necessary action as required by article 12 of pending agreement dated April 25, 1924. I am asked to urge you employ every proper effort to cause action to be speedily taken. It is thought that negotiations will be completed during present month.
2.
Financial Service of Reparation Commission today unanimously recommended that commission accord to the new bonds to be issued in substitution for the old relief bond the same priority over reparations which that enjoys. Anticipate that commission at next meeting will take this action to be effective providing Congress has taken or shall take necessary steps.
3.
With respect to similar action granting priority to reconstruction loan over relief bonds which must be taken by other powers holding relief bonds before the Secretary of the Treasury waives relative existing priority. Am informally advised that Hungary has already been informed by all countries except France that they are willing to subordinate their relief bond priority in favor of reconstruction loan. France has informally indicated her adherence and states that formal letter will be forthcoming this week. Have recommended that certified copies of original letters from the various powers addressed to Hungary be immediately despatched to Washington for the information of the Secretary of the Treasury.
4.
Kindly keep me advised of any progress on subject especially as to congressional authorization. It will be remembered that the United States caused some delay in connection with its action regarding Austrian relief bond6 and it is to be hoped that this can be avoided in the present instance. Hungarians fear a collapse of the Crown and every day counts.7

Repeated to Budapest. Logan.

Herrick
  1. For measures taken to suspend financial claims against Austria by the United States and other creditor nations, see Foreign Relations, 1922, vol. i, pp. 613 ff.↩
  2. Mr. Logan was informed on May 21, 1924, of the passage of the refunding agreement by the House, May 12, and by the Senate, May 17.↩