sentatives have selected. Representatives of the Government of the
United States may at their discretion conduct discussions directly with
owners of property or with contractors for improvements as to fair
terms and price prior to the acquisition of such property or improve-
ments by the Government of Hungary for delivery to the Government
of the United States. When performance of any such contract is made
by the Government of Hungary, the Government of the United States
shall credit the Government of Hungary with the United States dollar
equivalent of the fair value received at an exchange rate as provided in
subparagraph (4) (b), such credit being applie first to past due in-
terest, if any, and then pro rata to all remaining unpaid installments of
principal. The total value of property to be delivered by the Gov-
ernment of Hungary in any calendar year shall be subject to the annual
limitation specified in sub-paragraph (4) (a).
  (7) If these terms are agreeable to your Government it is requested
that you indicate its acceptance thereof by signing and returning to
me the enclosed duplicate original of this letter. When this has been
done I shall inform my Field Commissioners as to the terms in order
that they may be appropriately incorporated or referred to in any
contracts for the sale or exchange of surplus property which may be
executed between my Field Commissioners and representatives of
your Government.
  As we have explained in our informal discussions with representa-
tives of your Government, the purpose of this letter is to facilitate our
surplus property transactions by arriving at an overall understanding
as to a maximum line of credit, credit terms and exchanges of
property.
  Sincerely yours,                           THOMAS B. MCCABE
  The terms of the foregoing
    letter are hereby accepted.
                 Aladar Szegedy Maszak
  (Date) Washington, 25 April, 1946.

711.6427/4-2546: Telegram
  The MAinister in Hungary (Schoenfeld) to the Secretary of State

RESThICTED                       BUDAPEST, April 25, 1946-6 p. m.
                                   [Received April 27-3: 20 p. m.]
  '774. I am delivering under today's date the following note to the
Ministry for Foreign Affairs of Hungary.86
  "I have the honor to acknowledge receipt of Your Excellency's note
No. 434/POL. 1946 of March 1, 1946 replying to my Govt's request
for interim operational aviation rights contained in my note of Feb-
ruary 26, 1946 and informing me that, while the Hungarian Govt
' Delivery of the note that follows was authorized by the Department in tele-
grams 320, March 28, and 397, April 17, to Budapest (711.6427/3-346 and 4-246,
respectively).



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HUNGARY