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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 541

  "In the light of the fact that many important details of the negotia-
tion between the Polish Government and the Foreign Bondholders
Protective Council in the United States, and between the Polish Gov-
ernment and the Council of the Corporation of Foreign Bondholders
in Great Britain still appear to be unsettled, the Department does not
feel itself in a position at this moment to indicate whether the settle-
ments under discussion would involve any serious question of discrim-
  Mr. Zoltowski said that Mr. Ruezynski and he had twice been in
telephone conversation with Warsaw during the day, after having tele-
graphed a report of yesterday's conversation last night.
  It had been rather hard to hear all particulars over the telephone
from Warsaw, but it appeared that as time was so short before the
October 15 coupons on the Stabilization loan become payable in New
York and London, the Finance Minister had decided, subject to ap-
proval by the Polish Cabinet, that Poland should pay coupons due
beginning October 1 at the rate of 41/4%o of the principal instead of at
the rate of 35 percent of the coupons as announced in Poland's Feb-
ruary proposal. That is, the October 1 coupon of the 6s of 1920, a
dollar loan, will be paid at the 41/4%o rate instead of the 2.10%o rate
(35 percent of 6 percent), and the October 15 coupons of the Stabiliza-
tion Loan (both sterling and dollars) at the 41/4%o rate instead of
the 2.45 % rate (35 percent of seven percent).
  Mr. Zoltowski said that in view of the British attitude, this uni-
lateral decision of Poland to pay British holders less than the British
had demanded and to pay American holders the same rate although
it was higher than the rate proposed [to] Americans, as announced by
the Foreign Bondholders Protective Council last February without
adverse recommendation, was an evidence of how far Poland is going
in order to avoid discrimination.
  Messrs. Zoltowski and Ruezynski were leaving for New York by the
first train after their present conference with the State Department.
They expect to receive a cable tomorrow morning giving particulars
in time for them to get an announcement into the evening newspapers.
They expect also to see the Foreign Bondholders Protective Council
during the day. The Council would hardly be in a position to express
disapproval of terms better than those it had passed on to bondholders
last February without expressing disapproval.
  Mr. Feis suggested that this disposition of October coupons would
give the Poles more time to negotiate for a permanent settlement.
They said that it would extend the time for negotiations, which it
had been impossible to conclude before the October 15 due date,
largely because of the London attitude.
  Mr. Feis asked whether they had made any written offer to the
Foreign Bondholders Protective Council. They said they had not
done so. They needed first to work out some formula acceptable to

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