863.51/236 a
The Secretary of State to the Chargé in Austria (Frazier)
Sir: The receipt is acknowledged of your despatch number 442, dated December 19 [13], 1921,1 and your telegram number 3, dated January 9, 1922,1 which have been read with interest.
In further reference to the status of the proposed plan for Austrian relief which seems to be so generally misunderstood and as it would appear that several of the interested Powers are endeavoring to place the blame for the failure of this plan on the United States, the Department considers it advisable to give you the latest information at its disposition in regard to the attitude of all the interested European Powers concerning the proposed plan of the League of Nations for the economic rehabilitation of Austria.
At the Supreme Council, London, March 17, 1921, the British Minister announced that England would be willing to postpone all her claims against Austria for a period of twenty years.
At this session of the Supreme Council, France also agreed to defer its claims against Austria under the same conditions as Great Britain.
The Italian representative at this session, while approving the general plan for Austrian relief, made several reservations, and further stated on behalf of the Italian Government that a definite decision could not be taken at that time. After various discussions in subsequent sessions of the Ambassadors Council, the Italian Government finally announced that it would in no case assent to the plan unless all the interested Powers including the United States assented. At the meeting of the Ambassadors Council of August 17, the Italian Ambassador announced that this condition would be waived and that Italy would give her assent to the plan provided the other Allied Powers allotted Italy a block of “C” series German reparation bonds, in compensation for her general reparation claims [Page 614] against Austria, and further, that the other Allied Powers give their assent to the Italian proposal to set off the costs of the Italian Army of Occupation in Austria against the payments which Italy was bound to make on account of reparations for Austrian public property in the Austrian territory ceded to Italy.
This proposal of the Italian Government on the acceptance of which depended Italy’s assent to the plan for Austrian relief was referred by the Ambassadors Council to the Conference of Allied Finance Ministers, together with various other inter-allied financial arrangements concerning Belgian priorities, et cetera. The Council of Inter-allied Finance Ministers agreed to the arrangements submitted, with the exception of M. Doumer, the French Finance Minister, and the Japanese representative, both of whom accepted, under the reservation of approval of their Governments.
It is understood that the assent of the Japanese Government has been received but the assent of the French Government has never been given. The situation is, therefore, curiously involved.
Both Italy and France state that they have given their assent to the plan for Austrian relief, whereas, actually the Italian assent cannot be effective until the complicated proposals of the Italian Government are accepted by France, and, up to the present time, there is no indication that France will accept these proposals. Even, therefore, if all the other Powers had assented, no progress could be made until the Franco-Italian difficulty is straightened out.
It would appear, therefore, that the repeated statements of both the Italian and French Foreign Offices, that their Governments had given their unconditional assent to the plan, are not of much practical value.
Switzerland’s claims against Austria are only for relief credits advanced since the Armistice, aggregating about twenty million Swiss francs, and the Swiss Government has received parliamentary authorization to defer these claims against Austria for twenty years.
It is understood that the Dutch Government has received authority to defer its relief credit advances for twenty years.
Norway and Sweden have announced that they take a favorable view of the proposed plan, and will endeavor to secure parliamentary authorization to postpone their claims for twenty years; but their assent is subject to parliamentary approval which has not yet been given.
No advices have been received in regard to the attitude of the Danish Government, but it is unofficially understood that the Danish Government approves of the plan although no definite action has been taken.
Czechoslovakia has announced her unconditional assent to the proposed plan, but the possible Czech claims are very small.
[Page 615]The attitude of the Yugoslav Government is very doubtful, and it is understood that the possible assent of Yugoslavia depends on the granting of several concessions by the Principal Allied Powers in regard to both the liberation bonds and the payment for properties of the former Austrian and Hungarian Government in its territory. From the information at the disposition of the Department, it would appear that the Yugoslav Government wishes to postpone all payments to the Allied Powers on these two accounts for the same period that its claims against Austria are deferred. Under these circumstances, it would seem that the assent of the Yugoslav Government to the proposed plan is extremely doubtful.
The Roumanian Government has not assented to the plan. No information is available which would tend to show that the Roumanian Government views this plan with favor.
The assent of the Greek Government has not been obtained and there are no indications of its attitude.
You are requested to inform the Department promptly in the case that any of the foregoing information is not in accordance with your understanding of the facts and the Department would be glad to receive any information you may be able to obtain confirming or modifying the foregoing.
You are authorized to make such discreet use of the foregoing information as you may deem expedient in informal conversations with the Austrian Foreign Office and you are requested to keep the Department fully informed of any further developments.
I am [etc.]