Loans; Inter-Allied debts
67UA AO
No. 583.
BRITISH EMBASSY,
WASHINGTON, D.C.,
June 22th,
My Lord,
S'^Li^j^j With reference to my despatch No. 1U67
' of December 28th, 1939» I have the honour to forward
_ herewith copies of the letters exchanged this month
between the United States Government and the Govern-
ments of the countries (other than the United King-
dom) which are indebted to America on war debt
account.
2. Except for the cases of Hungary, Roumania
and Finland, the exchange of correspondence has
taken the same course as before.
3* The Hungarian Government, while making the
same token payment of #9,£28.16 as before, calls
attention at greater length to their aide-memoire
of February 7th, 1938, proposing negotiations for a
new agreement, and emphasises the fact that the
Hungarian debt is not a war debt proper but a relief
debt.
k» The Roumanian Government calls attention
once more to their note of May 3rd, 1939» proposing
fresh negotiations for the settlement of their war
debt.       At the same time the Roumanian Government
has made a payment of #100,000, to be held in a
special account and used if and when a new agreement
enters into force. Th* United States Government
has accepted this payment and undertaken to deposit
it/
The Right Honourable
L:FRHM:GHSP:NT
The Viscount Halifax, K. 0.,
-2-
it In a special deposit account with the Secretary
of the Treasury, while calling attention to the fact
that they have no power to modify the existing debt
agreements and emphasising that the acceptance of
this payment should not be deemed in any way to
prejudice the rights of the United States Government,
5* In the case of Finland, a Joint Resolution
was lntrouuc*d in Congress shortly before   June 15th,
giving Finland the right to spread the payment of the
instalments of 19U0 over the following ten years,
subject to the audition of interest at 3$. Though
this resolution was passed by Congress on June 14th
it was not signed by the President until late on
June 15th.       Meanwhile the Finnish Minister had
actually paid the instalment due.     I believe that
the Finnish Government hope for some more favourable
action by the United States Government before the
next instalment becomes due, and it is uncertain
whether they would have taken advantage of the Joint
Resolution this month even if it had been signed
in time.
6. Except for the case of Finland, the whole
subject attracted less attention from the press than
ever before, although the usual unflattering remarks
were made in Congress and in certain other quarters,
particularly by the "Make Europe Pay War Debts"
Committee, which includes some members of Congress and,
consciously/
consciously or unconsciously, lends Itself to
the dissemination of propaganda which has a
distinct German flavour.
I have the honour to be,
with the higiest respect,
i*y Lord,
Your Lordship's most obedient,
humble servant,
(SOD) LOTHIAN