The Waterbury Democrat., 1939-01-25
GERMANY GETS
 NOTEFR0M J. s,
Nazis Accused of Creating Determinations on Citi-
 gems of This Country
BY HOBART c. MONTEE

OdAls 6C- q AAS S4AAeeN States accused Germany of well known discriminations" against American citizens today in 8 formal. note suggesting that settlement of Austria's debt would be facilitated by extension of the most favored nation treatment to American cred itors.
 The note, another in a longer series exchanged between the two coun- tries on allged determinations against the rights and property of American citizens in Germany, was made public " the state depart ment. It was delivered to the Ger man minister of foreign affairs in Berlin Jan. 20 by charge d'affaires Prentiss B. Gilbert.
 Simultaneously 1t was announced that on Jan. 3, Germanydelivered a note to Gilbert proposing to ne- gotiate the Austrian debt situation with view to scaling down in- terest rates. .... ..-
 First Note On Debt
 The first note regarding the Aus trian debt was delivered to the German government by the U. S. ambassador on April 6, a few days after Germany's absorption of Aus tria. ,.f.t.a
 The latest note said the United States cannot accept" Germany's legal interpretation that on obliga- ton exists for it to assume debts contracted by the former Austrian government, and declined the offer to enter direct governmental nego- tiations.
 Indebtedness toward private citi- zens is a matter for negotiation be- tween debtor and creditors rather than between the government of the debtor country and the government of the United States" the note said.
 The note also rejected Germanys contention that any arrangement for payment on the old Austrian bonds must be linked to an increase of German exports to the United States. It doubted Germany's good faith, both in the matter of its official declaration of having no in- tention of discrimination against American creditors, and in the sen- cerity with which it has tried to reach settlement.
 Points Made Tn Note
 The note made the following Spe- cific pointe:
 1. "The government of the United States has not ceased to protest against the principle implicitly pro- posed that the. responsibility of a debtor government for its debts can be made by the debtor to depend on the balance of trade between tn debtor country and the country of residence or citizenship of the bond holder.
 9. "The original loan obligation contracted by the Austrian govern- ment pledged the same taeatment to all holders and made no distinc- ton on the basis of nationality. It is believed that the full weight of this pledge is still incumbent uupon the German government.
 fully
 3. These securities were being fully serviced prior to the absorp- ton of Austria ino greater Ger many, which development was ac- companied by the taking over of the sources of revenue pledged to the service of these scuritis. The bond- holders cannot but feel injustice in being deprived of these pledged rv- enues and having their prospect of payment made dependent upon the negotiation of complex intergoverr- mental economic arrangements.
 4. rThe German government states that it does not have the in- tention to discriminate against American creditors as campered with other foreign creditors. While the, statement must be read in the light of tn actual practices of the German government which result in well known discriminations against American creditors, the amounts in- volved in the. case of the. Austrain bonds do not appear to be such as would cause any serious difficulty for the German government should it be disposed to extend to American holders treatment as favorable as 1t gives those who are citizens or resi- dents of the most favored nation"
 Involves $26,00O,O00 '
 The controversy involves $26000,- 900 worth of Austrian government bonds held by the U. s. government: an undetermined total of the Aus train government international loan of 1930,-'3 an undetermined amount of dollar bonds of Austrian political subdivisions and corporations held hv American ritizaf1a nr. raeidaf,ta Including the belief bonds held by the U. IS. government the total is estimated at between $40,000,00O and $45,000000.
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