462.00 R 296/855: Telegram
The Secretary of State to the Ambassador in France (Herrick)
53. L–206 for Logan.
(1) Substance your L–31717 and L–33218 communicated to the Treasury. Latter of the opinion that arrangement suggested in third paragraph your L–317 should be accepted, it being made entirely clear however that the position of the United States as a creditor of Belgium remains unchanged. Treasury would be glad if you can arrange as you suggest for payment in Belgian francs or other currencies freely convertible into dollars in place of German marks. However, the Treasury would not desire any commitment in this respect which would release Belgium from the requirement of handing over to us German marks if that were the only way in which payment could be made.
(2) Treasury suggests that you obtain following letter from Gutt:19
“My dear Mr. Logan: I desire to confirm our understanding that the sums to be received by Belgium under Article 4 of the Agreement of January 14, 1925, by reason of the debt of Belgium to the United States of America shall be paid over to the United States by Belgium when and as received on account of the indebtedness of the Belgian Government to the United States.
[Page 527]My Government is prepared to take appropriate steps to that end and, having in mind your desire that payments be made in currencies freely convertible into dollars. I take pleasure to assure you that my Government will use the funds to be received under this head in marks for the payment on account of deliveries in kind to be received by Belgium from Germany and will pay to the Government of the United States the equivalent amount in Belgian francs or in currencies freely convertible into dollars.
I shall be glad if you will let me know whether the foregoing is agreeable to your Government and advise me as to any details with respect to the procedure to be followed in making these sums promptly available to the Government of the United States”.
[3] Treasury suggests the following reply to be made by you
“My dear Mr. Gutt: In reply to your letter of blank regarding the payment to the United States of the sums received by Belgium under Article 4 of the agreement of January 14, 1925, I beg to inform you that my Government has instructed me to state that it will apply on account of the indebtedness of the Belgian Government to the United States the sums thus received from the Belgian Government, it being understood that the Government of the United States of course continues to look to Belgium for the payment of the entire amount of its indebtedness to the United States.
I am also directed to express my Government’s appreciation of your assurances given with respect to the intention of the Belgian Government to make these payments available to the Government of the United States in Belgian francs or currencies freely convertible into dollars.
It is understood that any payment of the above account in currencies freely convertible into dollars will be credited to Belgium at the equivalent thereof in dollars at the current rate of exchange at the time of such payment. Payments may be made to the Federal Reserve Bank of New York or by deposit in the national bank of the country whose currency is used, in the name of the Federal Reserve Bank of New York for account of the Treasury of the United States, it being understood that the Federal Reserve Bank shall have the right at any time to convert into dollars the amount standing to its credit in the account.”
(4) If Belgium desires any change in the foregoing draft letters, do not modify above texts without consulting Department.
(5) [Paraphrase.] For your information it is Treasury’s intention to apply payments referred to against interest on the Belgian debt to the United States; upon receipt of the first payment Belgian Government will be duly advised. [End paraphrase.]