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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa

Poland,   pp. 525-563 PDF (14.2 MB)

Page 540

540            FOREIGN RELATIONS, 19 3 7, VOLUME II
ment with interest rate reduced to 41/4%.26  Payment including de-
faulted interest to be resumed this fall and extended for 15 years in
all. Settlement apparently based on Ulen27 and Swedish settle-
Memorandum by the Assistant Adviser on International Economic
                          Affairs (Livesey)
                                     [WASHINGTON,] October 13, 1937.
Conversation: Mr. Zoltowski, Financial Counselor, Polish Embassy;
                Mr. Ruezynski, Ministry of Finance, Warsaw;
                Mr. Feis;-29
                Mr. Nielsen; 80 and
                Mir. Livesey.
  Mr. Feis said that the conversation of yesterday 31 had been carefully
considered and discussed in the Department and finally had been
briefly discussed with the Secretary. As a result Mr. Feis had jotted
down a little note on the position. He gave Messrs. Zoltowski and
Ruczynski copies as follows:
  2 The Standard Car Finance Corporation, with principal offices in Wilmington,
Delaware, by agreements of December 6, 1929, and February 5, 1930, had ac-
quired from the Society of Mechanical Plants "Lilpop, Rau and Loewenstein,
Ltd.," of Warsaw, the notes of the Treasury of the State of Poland,
in excess of
a principal amount of 10 million dollars, issued as rental for the construction
use of a large number of freight and passenger railroad cars. Beginning with
October 1, 1936, the Polish Treasury had defaulted in the payments on account
of principal and interest at 7 percent due on these notes. Definitive legislation,
effective on July 26, 1938, for the agreement here mentioned, provided for
issuance and delivery of 4'A percent certificates of the Polish State Treasury
the principal amount of $5,669,036.98, their payment to be completed by October
1, 1951. (860C.51/1199, 1227, 1361)
  " Ulen and Company, of New York City, owned 8 percent Sinking Fund
Bonds in two issues (1925 and 1926) of the National Economic Bank of Poland,
unconditionally guaranteed by the Polish Government. These bonds had been
received in payment for extensive public works undertaken by the Company
10 different cities of Poland. Defaults began on these issues in 1936. For
text of the full provisions of the two Extension Agreements of May 26, 1937,
by which interest was reduced to 3 percent and maturity prolonged to 1967,
Annual Report, 1937, pp. 639 ff., and 653 ff.
  28This temporary plan concerned the 61/2 percent External Secured Sinking
Fund Gold Bonds of 1930, issued by the Republic of Poland to the Swedish
Interests, pursuant to a match monopoly agreement. According to the permanent
plan of December 7, 1938, interest was to be paid at the rate of 4%/4 percent,
sinking fund payments were to be resumed on April 1, 1939. It was believed
none of these bonds was held within the United States. See Annual Report,
p. 847.
   Herbert Feis, Adviser on International Economic Affairs.
   ' Orsen N. Nielsen, of the Division of European Affairs.
   " Memorandum of conversation not printed.

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