The annex referred to in the Chancellor’s letter was transmitted with my
despatch under reference.11
[Enclosure]
The Austrian Chancellor (Seipel) to the American Minister (Washburn)12
Excellency: The “Comité de Contrôle des
Etats garants pour la reconstruction de l’Autriche” (Committee of
Control of the Guarantor States for the Reconstruction of Austria)
have at the request of the Austrian Government consented in their
meeting held in London on October 12th, 1927, to the conclusion on
the part of the Austrian Republic of an investments loan to yield an
amount of 725 million Schillings.
This decision was based on a statement of the Austrian Government on
Austrian revenue and expenditure during the years 1923–1927; on the
sums required for capital expenditure (investments) from 1928 to
1932; and on the actual state and the use made of the Austrian
Government Guaranteed Loan 1923–1943. I have the honour to annex to
these presents three copies of the said statement for
information.
[Page 449]
The following points of the contents of the statement seem to me to
require special mentioning:
The current administration of Austrian Federal Finance resulted in a
deficit only in the first year of reconstruction, i. e. in 1923,
while in the subsequent years fairly considerable surpluses were
obtained. Therefore, the total deficit shown in the years from 1924
onwards, represents such part of capital expenditure only as was not
covered by ordinary revenue, and, consequently, had to be defrayed
out of the yield of loans. Thus Austria succeeded, thanks to the
magnanimous support it received from all the nations participating
in the work of its reconstruction, to save its finances from utter
ruin and to establish the permanent equilibrium of the budget.
Moreover, a large portion of the purely productive capital
expenditures was covered by current revenue, so that the proceeds of
the reconstruction loan set apart for such capital expenditure, will
be sufficient up to the first months of 1928. Now, as is also shown
by the enclosed statement on the use of the said loan, the sums
disposable under this heading are almost exhausted. Only a sum of
approximately 26 million Schillings is left for capital expenditure
in 1928. The great works of reconstruction Austria undertook with
the help of funds drawn from the reconstruction loan, in the first
place the installation of electric traction on the Federal Railways,
and the laying of long distance telephone cables, both of them works
of highest importance to making Austria’s balance of payments
active, must be continued and completed, if the result aimed at,
namely to secure for Austria’s economy a permanent adequate position
in the ensemble of the various European economies, is to be
attained.
My Government therefore finds itself obliged to proceed to the issue
of an investments loan for which the basis is given through the said
decision taken by the Committee of Control in accordance with
Article 7 of Protocol II dated Geneva October 4th, 1923 [1922].13
To be able, however, to contract the loan under suitable conditions,
Austria requires her assets to be freed from the lien imposed upon
them under the terms of Article 197 of the Treaty of St.
Germain14 for purposes of
reparation, as well as under the terms of the relief bonds issued by
Austria for the relief credits granted to it. Likewise a further
postponement for this purpose is required of the payments to be made
in accordance with the stipulations of these bonds.
My Government has at the same time addressed to the Reparation
Commission the request to defer in favour of the intended loan and
for a period of 30 years i. e. up to 31. december, 1957, the charges
laid upon all the assets and revenues of Austria by virtue of
Article
[Page 450]
197 of the Treaty
of St. Germain. It now ventures to ask also the Government of the
United States of America to grant the suspension of the lien, and
the postponement up to 31 december, 1957, of the payments due for
the relief credit granted to Austria to the amount of about 24
million Dollars plus interest.
In view of the nature of the proposed investments my Government deems
it indispensable that the loan to be contracted should be for 30
years at least, lest in the next few years that are devoted to
further reconstruction work, Austrian economy be charged with too
heavy obligations for the repayment of the loan.
In bringing the above request of my Government to your knowledge, I
should be greatly obliged if Your Excellency would kindly forward it
to the Government of the United States and advise me, at the
earliest possible date, of the decision taken by them in the
matter.
I avail myself [etc.]
