800.51W89 Estonia/95
The Estonian Minister for Foreign Affairs (Rei) to the Secretary of State 70
Excellency: I have the honour to submit to Your Excellency that the Agreement made the 28th October, 1925, at the City of Washington between the Republic of Estonia and the United States of America regarding the settlement of the indebtedness of Estonia incurred during her War of Independence, was mutually based on the capacity under normal conditions of Estonia to pay, as estimated at that time. The above basic principle has subsequently been authoritatively confirmed by public statements made by the United States President as well as by the approbation given by the Congress to well-known measures of the United States Government.
It is in these facts that the Estonian Government seeks authority to invite the friendly attention of the United States Government to the circumstance that as a result of the grave economic depression the basis of the settlement of 1925, contrary to the wishes and expectations, and to the greatest regret of the Estonian Government no longer exists.
[Page 721]An earlier request to this effect was postponed by the generous proposition of the President of the United States of June 20, 1931, to suspend during one year all payments on intergovernmental debts, reparations and relief debts, a well-timed measure accepted by the Estonian Government with the sense of deepest appreciation and gratitude.
The many hopes raised in connection with the said initiative have unfortunately not been realized, and the universal depression, on the contrary, has still aggravated. In particular the depreciation of the sterling-pound and the subsequent universal restrictions of foreign trade and currency movement have placed the national economy of Estonia into many new difficulties, especially affecting the Bank of Estonia and restricting the exports of the country, which latter mainly give the means of meeting foreign commitments. In connection therewith the budgetary year of 1931/32, notwithstanding the suspension of payments to foreign Governments, ended on March 31, 1932, with a deficit of Kr. 3.381.276.71, gross expenditure amounting to Kr. 82.308.348.81 and gross receipts to Kr. 78.927.072.10.
Confronted with such difficulties the Estonian Government in June last requested the British Government to agree to a further suspension of payments due from Estonia on the 1st of July last and the 1st of November in respect of the Relief Debt and the Debt for War Supplies respectively, to which the British Government generously agreed until the 31st of December next, in spite of the letter of the corresponding agreements.
The economic and financial difficulties of the world and those of Estonia, however, have since then not been alleviated, and in particular the estimated state revenue of the current financial year has in reality already shown a decrease of no less than 20,5%. The Estonian Government has not failed to make, and is further making, most serious efforts to balance its budget, but is unfortunately not yet in a position to see a definite solution of this difficult task.
In view of all those circumstances, the Estonian Government now has the honour most earnestly to request the United States Government to see its way to enter into a friendly exchange of views regarding the position which arises from the unquestionable change of the capacity of Estonia to pay the debts incurred during her War of Independence, and to agree in the first place to the suspension of the payment due from Estonia on December 15, though this request in respect of interest may not be based on the letter of the Agreement of 1925.
I avail myself [etc.]
- Transmitted to the Department by the Estonian Acting Consul General at New York City, in charge of Legation, as enclosure to a note dated December 10; received December 12.↩