Misers, Moratorium & Countess

EASTERN EUROPE

Misers, Moratorium & Countess

Like misers in their closets, each little Central European government was trying to hoard its currency last week. Hungarians, always drastic and dramatic, were first to declare an actual "transfer moratorium." In Budapest handsome blond Baron Frederick de Koranyi (who in ornate Magyar costume on State holidays makes Magyar ladies' eyes dance) issued the Hungarian moratorium decree as Minister of Finance. It provides that for the next twelve months:

1) Payments to foreign holders of some two-thirds of Hungary's long-term bonds shall not be transferred outside of Hungary, but shall be paid in Hungarian pengoes into trustee accounts in Hungary where the money will be held for ultimate payment to the foreign creditors.

2) Preferred treatment will be accorded holders of the other third of Hungary's long-term bonds, the Government undertaking to transfer payments in foreign currency of interest due on the League of Nations Reconstruction Loan to Hungary of 1924 and similar preferred bonds.

3) Short-term credits in Hungary will be converted into long-term credits under a stillhaltung agreement (similar to that in Germany) which was being negotiated last week with Hungary's short-term creditors.

This moratorium was no surprise. Wall Street has expected some sort of Hungarian moratorium for months. The fact that it turned out to be only a "transfer moratorium," with pengo payments continuing to pile up in Hungary, softened the blow. But a blow it was. U. S. bankers have extended and U. S. investors hold roughly 25% of Hungary's short-term credits and bonds. On the total U. S. investment of $179,000,000 the loss or postponement of interest and sinking fund charges during 1932 will approximate $13,000,000.

France, when she made her recent "political loans" to Jugoslavia and Rumania, made them on the distinct understanding that there would be no moratorium in that quarter. But King Alexander, royal Dictator of Jugoslavia, was in Paris incognito only a few days ago, called at the Bank of France. Did he ask for more money? Did he get it? Was all quiet along the French anti-moratorium front?

Austria and Hungary are admittedly hardest pressed. In Vienna last week the Governor of the Bank of Austria, Van-dyke-bearded Dr. Richard Reisch, took abrupt and super-miserly steps to keep not only Austrian money but Austrians at home.

By agreement between the Government and the National Bank no Austrian may leave Austria unless he makes an affidavit:

1) That he has no money abroad.

2) That he is not taking abroad any Austrian money or more than $7 in foreign money.

On $7 no man travels far. In effect Dr. Reisch imprisoned Austrians in Austria last week. But exceptions will be made. Traveling salesmen who must go abroad to sell Austrian goods may take more than $7, the Government announced, hinted other exceptions.

In Hungary similar restrictions on private currency exports preceded the "transfer moratorium," and remained in effect last week. To the scandal of all Budapest it was suddenly discovered that the Countess Bethlen, a socialite playwright and wife of former Premier Count Stephen Bethlen de Bethlen, was outside Hungary on a literary lecture tour. Furious Socialist Deputies demanded to know what "sinister influence" had procured the countess enough foreign money on which to travel? Or was she a criminal? Had she secret deposits abroad? What of the new Hungarian law obliging every citizen to put such deposits instantly at the disposal of the Government?

The Countess Bethlen is the Countess Bethlen, a law unto her smart, svelte self. She exchanges plot ideas with Statesman-playwright Benito Mussolini. When her plays are produced in Italy he goes to them, claps his hands, wires congratulations. Obviously the Countess Bethlen was earning the foreign money she spent last week by lecturing as she traveled. But amid money hysteria in Central Europe few heads were clear. To Hungarian Socialists the lecturing countess seemed a creature without shame, unpatriotic, diabolic.

To Uruguayan editors U. S. Banker Otto Hermann Kahn also seemed last week to have horns, a tail. His diabolic act was to have testified before the U. S. Senate Finance Committee that "in the case of Germany there are hardly any [foreign bonds] in default. In the case of South America and Central America, unfortunately, the great majority are in default."

Enraged by this generality, El Pals of Montevideo flayed the Wall Street tendency "to group all South American Nations together as defaulters," argued that if even Banker Kahn did not appreciate the "heroic sacrifices" made by the Uruguayan people to meet interest and sinking fund charges on their bonds, Uruguay might as well declare a moratorium.

This file is automatically generated by a robot program, so reader's discretion is required.