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Austria (Financial Re-Organisation)

Volume 155: debated on Monday 12 June 1922

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asked the Prime Minister what progress has been made with the financial re-organisation of Austria?

The Austrian Government have taken steps to obtain a considerable increase of revenue by the revision of taxation, and are proposing various measures for the reduction of expenditure by the dismissal of superfluous personnel and the reorganisation of State industrial concerns. The following interim loans have been promised to Austria, in order to enable her to tide over the period before she has at her disposal the market credits, at present under the consideration of financial houses in London and New York:

Great Britain, £2,250,000.

Czecho-Slovakia, 500,000,000 Czech crowns.

France 55,000,000 francs.

Italy, about 70,000,000 lire.

The British credit was advanced in February last, and made it possible to arrest the fall in the value of the kroner for a considerable period. I understand that the French and Italian credits are not yet available.

Are we to understand that we are the only country so far that has lent money to Vienna, and that the other countries have not implemented their bargain?

There are certain securities in the shape of Austrian possessions, of which my hon. Friend knows, because he asked me a question before—certain art treasures and others. With regard to the question put by the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), I understand that the offer of help has not been fully implemented by other Powers to the same extent as by this country.

If the principle and interest are not paid, are you going to take the property?

Can the right hon. Gentleman say what is the state of the negotiations for what he called, I think, the "market advance"?

I understood that there was a temporary loan—I may have misheard the answer—of £2,000,000, and other promises, in order to give time for the permanent advance to be made.

There is no question of negotiations in the matter. The loan has been granted, and Austria has been dealing with it.

Have the Governmen taken any steps to try to secure freer trade between Austria and the neighbouring countries?

It was part of an amount the House of Commons voted for the aid of Austria—the last amount which has been advanced.

I understood the right hon. Gentleman to say this loan was granted by the British Government as a temporary measure in order to tide over the period intervening before a permanent advance could be made—a market advance. What is the condition of the negotiations as to that permanent advance?

I thought the Noble Lord had taken a very considerable interest in the matter, and I do not understand his misapprehension. The loan we have granted is a loan, not with a view to a permanent advance by someone else, but a loan by the British Government to Austria as against certain securities. It may be hoped that in the future, when Austria becomes better established again, she will be able to realise advances for herself from the market.

Is it not a fact that this loan was made pending a settlement by America which should empower Austria to pledge her Customs and other property in order to secure a general international loan? Has there been any progress made in the direction of getting that general loan properly secured, and, if not, what is our security at present, and how much longer are we going to go on with tapestries as a security?

I am afraid the hon. and gallant Gentleman has asked me a very long series of questions by way of supplementaries. I will answer to the best of my power. Undoubtedly the position of Austria became acute because of the fact that she was not able to get rid of the lien which existed over the whole*of her securities, and, taking special consideration of that fact, we agreed to make an advance which otherwise we should not have promised to make at all. We gave that advance because of the difficulty in which she then found herself, and because of her inability to get herself right. It was accordingly, pending the possibility of her obtaining such relief, that we gave that loan. It was because of the condition in which she found herself. It was not in any sense contingent upon her finding relief otherwise. Up to the present she has not been able to be put in a position in which she could get rid of the lien on her assets. Sufficient advance has not been made with that, question in America.

Is there any time limit in respect to loans promised by other Powers?