Office of the Historian

871.0443/5

The Minister in Rumania (Jay) to the Secretary of State

Bucharest, September 20, 1923.
[Received October 17.]
No. 453

Sir: I have the honor to acknowledge the receipt of the Department’s Instruction No. 215 of August 22, 1923, concerning the Rumanian Law for the Regulation of Commercial Indebtedness.

I note with satisfaction that my action in the matter met with the Department’s approval.

In accordance with the Department’s Instruction I addressed a Note to the Rumanian Minister for Foreign Affairs under date of September 20, 1923, a copy of which is herewith enclosed, embodying all the points to be brought to the attention of the Royal Government.

I took the first opportunity of seeing Mr. Duca after his return to Bucharest from the country and of bringing up this note, which I was glad to find, he had already read. Upon his implying that its tone was somewhat severe I emphasized that it was a matter about which my Government was deeply interested and added that I felt that it was not only fully justified but also not any stronger than [Page 652] the protests he had received from many of my colleagues. This latter assertion he admitted. His Excellency gave me to understand,—thus confirming the rumors which have been reported by the Legation,—that the Rumanian Government was seriously considering the modification or even abrogation of this law.

My personal opinion is that this will be done in view of the very vehement protests made by all the great powers and especially owing to the desire of the Government to obtain the granting of the long promised French loan. The French Government’s loans, nominally for the purchase of war materials in France by Rumania, Czechoslovakia and Poland having been—as the Department is probably aware,—held up by the French Senate, I learn that Senator Berenger, who is I believe the Chairman of the Finance Committee of the French Senate, is about to visit Rumania and the other two mentioned countries for the purpose of investigating their financial stability. As the very large French Commercial interests in Rumania are receiving especially vigorous support from their Government through its Legation here, I feel that this proposed visit is one more reason to expect at least a very broad modification of the objectionable law.

I have [etc.]

Peter A. Jay
[Enclosure]

The American Minister (Jay) to the Rumanian Minister for Foreign Affairs (Duca)

Bucharest, September 20, 1923.
No. 104

Mr. Minister: I have the honor to refer to the interview which Your Excellency was good enough to grant me June 9, 1923, when I protested against the application to American citizens of the law of May 29, 1923, for the settlement of private debts between Rumanians and foreign creditors, whose exchange in relation to the leu is higher than the pre-war parity. As I informed Your Excellency, I did not fail to communicate the full text of this law to my Government which has taken due cognizance thereof.

The Government of the United States appreciates that while, in some instances, Rumanian debtors may not be able to pay debts due in American or other foreign currency, in view of the appreciated value of such currency as compared with Rumanian Lei, other Rumanian debtors are undoubtedly amply able to pay the amounts due in foreign currency and should be permitted to do so in accordance with their contracts without Governmental interference. Should an extension of time be desirable in any instance, it is within the province of the interested parties to make some arrangement to that effect.

[Page 653]

My Government has charged me to inform the Royal Government that it considers the law in question not only discriminatory in that it does not apply to all debts but merely to those due in certain currencies which have appreciated in value as compared with the lei, but that it seriously impairs the obligation of private contracts entered into in good faith not only by substituting an arbitrary, and, doubtless, in many cases a lower rate of interest than that which was provided by contract, but also by extending for a long period of years the time in which payment can be made.

The Government of the United States will regard any attempt to impose upon American creditors, without their consent, the law in question as an improper governmental interference with existing private contracts, and it cannot agree to the infringement of the rights of its nationals in the manner proposed by the law.

Accept [etc.]

Peter A. Jay