862.51/2122b
The Secretary of State to the Secretary of the Treasury (Mellon)74
My Dear Mr. Secretary: I have examined with considerable care the proposed letter to be sent out to bankers suggested by Mr. Winston [Page 185] with some changes suggested by Mr. Hoover.75 It seems to me that, having deliberately adopted the form of letter which has been sent to all the bankers, we ought not to depart from it any more than is made necessary by changed conditions, because I am sure the matter is bound to come up in Congress and that we would then be asked why we had entirely changed the form of our letter.
I am enclosing a copy of the original form of letter which we have been sending out, in which the proposed changes and additions are underscored and the omissions put in brackets.76
There is one change which I think we could consistently make, i. e. to omit the part of the letter in brackets on pages three and four which indicates that the bankers should satisfy themselves as to the attitude of the Transfer Committee and inform their clients of the situation. They have inquired of the Transfer Committee and Mr. Gilbert has made a public statement to the effect that the Committee is not in a position to give any assurance concerning the payment of interest or amortization of German loans floated abroad. I am sorry to say that this statement has not received the publicity and attracted the attention that it should have, and therefore I think we ought to call attention in the letter to just what he said. This puts the bankers on notice. I am willing therefore to omit the part of the letter in brackets if you feel as though, on account of their inquiries from Gilbert, we should not continue to send this portion of the letter.
I also think at this stage of the proceedings it is sufficient for us to continue to call attention to the fact that the German authorities are not in favor of indiscriminate German loans. It would be all right for us to ask them whether they have received the consent of the Advisory Board if we knew that any such board was going to exercise any real control. Up to the present time, we have no such information after repeated inquiries to Berlin; in fact, we are advised by our Ambassador that there is no likelihood that there will be any real control exercised.
Please let me know as soon as possible whether you agree, since, as you know, several German loans are now pending before this Department.
Very sincerely yours,
- A similar letter was addressed on the same date to Herbert Hoover, Secretary of Commerce. Mr. Arthur N. Young, Economic Adviser to the Department of State, took these letters personally to Mr. Mellon and Mr. Hoover and discussed with them and with Mr. Winston, the Under Secretary of the Treasury the proposed form for letters to interested bankers. For a sample of the revised letter to bankers, see letter to Harris, Forbes & Co., November 21, infra.↩
- Not found in Department files.↩
- Marked copy not found in Department files.↩