CREDITS FOR AUSTRIA. (Hansard, 3 November 1921)

THE FIRST COMMISSIONER OF WORKS (THE EARL OF CRAWFORD)

My Lords, it will be remembered that in March last the Supreme Council at its meeting in London expressed a desire that the Financial Committee of the League of Nations should examine the financial situation of Austria and seek means of remedying it. After a preliminary survey the Financial Committee stipulated certain conditions as necessary before the restoration of Austria's credit could be undertaken. The main conditions were that the Governments having liens on Austria in respect of reparation and relief credits should agree to postpone those liens for a period of not less than twenty years; that trade barriers between Austria and neighbouring countries should be removed; and that the Austrian Government should itself take stringent measures to improve its internal financial situation.

A delegation from the Financial Committee subsequently visited Austria and returned with assurances from all Parties in Austria that the third of the above conditions would be carried out. The delegation were themselves satisfied with the programme of financial reform which the then Austrian Government drew up and promised, with external assistance, to carry out. The external assistance to Austria which the delegation proposed and the Financial Committee approved was to comprise— (1) temporary advances to cover the period before (2) the issue of an external loan, and (3) the establishment with the help of foreign capital of a State Bank.

The one absolutely necessary preliminary to the putting into operation of this scheme 176 — namely, the release of the reparation and relief credits liens, was, however, still to be assured. From the time that the League of Nations scheme was definitely formulated in June, 1921, the energies of the Financial Committee, assisted very prominently by His Majesty's Government, have been directed solely towards obtaining the consent of the interested Governments to the postponement of the above-mentioned liens, as until such consent is obtained the League of Nations scheme cannot become operative. Of the countries having liens on Austria in respect of reparations agreement in principle has been announced by all countries except Rumania, though in some cases detailed conditions of such agreement remain to be adjusted.

The Governments of all countries having liens on Austria's assets in respect of relief credits have agreed to postponement, with the exception of the United States of America and Holland. The United States Government has expressed its benevolent intentions with regard to the scheme, but is at present without legal authority formally to release its liens: such authority is being sought in the Bill recently passed by the House of Representatives and now before the Senate, upon the passing of which Bill it will be possible, it is confidently hoped, for the United States Government to deal with its liens on Austria in the desired manner. The Netherland Government, the other outstanding Government having claims on Austria for relief credits, is still considering the matter of postponement, and His Majesty's Government are pressing for an early and favourable decision. It will be seen therefore that the conditions necessary to the operation of the League of Nations scheme for assisting Austria are not yet fully assured, but His Majesty's Government is very hopeful that all difficulties will be removed at an early date.

Certain assistance is, however, being given to Austria at this moment. Arrangements have been made for a sum of £250,000 to be placed privately at the disposal of the Austrian Government through the Anglo-Austrian Bank in Vienna and for a further sum of £250,000 to be made available from French sources through the Laender Bank in Vienna. These two advances (which do not necessarily comprise all the credits which might be made available) will be used mainly for the purchase of food supplies outside Austria or for other approved purposes.