862.51/2061
The Ambassador in Germany (Schurman) to the Secretary of State
[Received October 16.]
Sir: Referring to my confidential despatches Nos. 295, of September 15, and 329, of September 23, 1925, on the Credit Question, I have the honor to say that I desire again to go on record as issuing a warning on the present policy of American financiers in lending money in Germany. The Vossische Zeitung of this morning states that the Bavarian loan was oversubscribed shortly after it was offered on the New York Stock Exchange. This loan, of course, belonged to the class that is being so roundly denounced by leading Germans.
This whole question was recently fully discussed at the Bankers’ Annual Congress, where the opinion was expressed, on all sides, that “foreign loans should be avoided as far as possible and should be contracted only when they will speedily and directly increase national production, and, in particular, increase the production of goods that are sure of an export market, so enabling interest and principal to be paid.”
It is a commentary upon present conditions that representatives of American financial interests here in Berlin have actually been competing against each other in an effort to get some of the loans recently contracted.
I have [etc.]