871.51/596
The Minister in Rumania (Jay) to the Secretary of State
[Received December 29.]
Sir: I have the honor to report that, having learned that the Rumanian Government is under pressure to extend again for a further period of three months the Term of Grace Law, which would otherwise expire on December 15th, I addressed yesterday a Note to the Minister for Foreign Affairs repeating our views on the subject and protesting against a further extension.
As will be seen from the copy I enclose, I have endeavored, while briefly reiterating our views, to lay emphasis on the concern felt by the Department, to indicate possible consequences and finally to place on record in writing before the expiration of the present extension an official protest against any further renewal.
I have laid stress on the impropriety of affording protection to the solvent debtor rather than on the discriminatory nature of the legislation—a contention vigorously denied in both Government and commercial circles.
The Minister for Foreign Affairs is well aware of the importance attached to the entire subject by our Government, especially as only last week (November 27th) during a long informal conversation in regard to all the questions at issue I allowed Mr. Duca to read the actual views of the Department which are so fully and clearly expressed in its Instruction No. 319 of November 7th last.65
It must be admitted that the Rumanian Government finds itself in a very difficult position, as collective commercial agreements [Page 661] have been concluded with British, French, Belgian, Italian, Swiss, and possibly other creditors, which obligate the Government to prevent by legislation foreign creditors on whose behalf no collective agreements exist, from obtaining execution of judgment.
If the Rumanian Government were to permit American creditors to obtain unconditional satisfaction of their claims, it would undoubtedly receive vigorous protests from the foreign governments concerned, whose nationals have been assured, by Rumanian legislation, protection against any such favored treatment to creditors of nations which have not concluded such agreements.
I fear that even if the Term of Grace Law is not given another extension, it will in practice be found impossible on one pretext or another to secure actual execution of judgments. Moreover, I understand that a “loi d’imprévision” (A law giving Courts discretionary power to grant a term of grace to debtors whose inability to meet their obligations is shown to be the result of circumstances beyond their control), such as apparently exists in certain countries observing the Code Napoleon, may be shortly incorporated in the Rumanian Civil Code, thus permanently replacing the Term of Grace Law.
The entire question of the payment of commercial debts is exceedingly involved. It is most difficult to ascertain at all definitely just how the laws and regulations are being applied, particularly in view of the influence which (it is widely believed) the Government is privately exercising upon the Courts.
The Department will have received the memorandum drafted by the Delegate of the Bucharest Chamber of Commerce which was transmitted in the Legation’s Despatch No. 676 of November 7th,66 and which covers very fully the situation from the Rumanian point of view.
I enclose a copy of a letter which our Acting Commercial Attaché has kindly written me at my request,66 giving me his personal survey and opinion of the question. As will be seen, Dr. Van Norman has gone over the entire subject with great care.
I have [etc.]