Evening star., 1938-03-28
By ]. RUSSELL YOUNG.

The Hungarian governments offer
to pay to this country the whole of its
relief loan, amounting to $1,s37 900,
dating from 1924, and without in
terest, was transmitted by President
Roosevelt to Congress today.
In an accompanying message the
President said he believed the pro-
posals should receive the most careful
consideration of the Congress.
In this connection, he said, 'they
represent q noteworthy wish and ef-
fort of the Hungarian government to
meet its obligations to this Govern
ment.
The President pointed out that the
Indebtedness of the government of
Hungary to the United States is not
a war debt, but is properly designated
as relief debt, having been contract
ed in May, 1920, under authority of
the act of March 80. 1920, which
authorized the United States Grain
Corp, with the approved OF the Secre-
tary Of the Treasury, to sell or dispose
Of flour in its possession for cash or
on credit at such prices and on such
terms or conditions as considered
necessary to relieve the populations of
the countries in Europe or contiguous
countries suffering from the want of
food. The American Relief Admins
tration acted as the fiscal agent of the
United States Grain Corp. in dispens-
ing this relief.
Funded Into Bonds.
The President went on to explain
that the original indebtedness. the
principal amount of which was ST.
6S5, ,835.61, with interest accrued from
May 20 to December, 1923, at the rate
Of AZ per cent per annum, was funded
as of the latter date by agreement
made in 1924, into bonds of Hungary
in the aggregate principal amount of
$l,939,000 maturing serially in the
succeeding years for 81 years, bearing
3 per cent for the first 10 years and
thereafter at the rate Of 31a per cent
per annum. In approving this plea
for debt settlement, the Congress au-
thorized the Secretary of the Treasury
to subordinate the lien of the bonds
taken Under it to the lien of the Hun
garian Reconstruction Loan, which
was about to be issued and sold in
numerous countries, including the
United States. In May, 1924, the Sec
retary, acting upon this authorization,
formally subordinated the American
Governments lien to the lien of the
Reconstruction bond issue.
BY way of further explanation, the
President said in his message that on
December %, 1881, the Hungarian
government proclaimed a transfer
moratorium, suspending payment in
foreign currencies Of all Hungarian
foreign obligations. public and pri-
vate, except the aforesaid reconstruc-
ton loan Of 1924. Payments on the
latter loan were subsequently suspend
ed in part.
Agreements Negotiated.
During 1887, the Hungarian gov
ernment began iquidating the trans
fer moratorium by negotiating agree
ments with the foreign holders Of
Hungarian obligations for the &C.
ceptance Of reduced payments in full
satisfaction OF existing Indebtedness.
The President pointed out that it is
in this connection that the Hungarian
government has now come forward at
It's own initiative In an effort to reach
an agreement to the United States
Government under which the relief
Indebtedness can also be discharged
In full.
The President reminded the Con-
gress that no readjustment Of the
terms and payments Of this indebted
ness can be made except by act Of
Congress. He added that the Hun
garian government Is seeking def
mite readjustment Of the terms Of
payment on the basis Of full pay
ment over . period Of years Of the
total Of the original amount bor-
HoWeA hslt Vifh0lt interest