862.51/2195: Telegram
The Ambassador in Germany (Schurman) to the Secretary of State
[Received 5 p.m.]
23. Your telegram No. 6, February 8, paragraph 2: I believe figures you give for long-term loans made in 1925 are correct for all practical purposes. Your paragraph 3: In view of widespread pronouncements by Dr. Schacht when he returned from the United States (see my despatch 511, November 2425), both the German Government and German industrial and financial circles generally then came to realize that there was real need for stopping the scramble of cities and states for loans, and soon the impression was created throughout the Reich that German public corporations must for the time being at least desist from their efforts to borrow abroad. Since then, therefore, the Advisory Board has received but few applications. I am as yet, however, unconvinced that considering internal political conditions and inherent constitutional difficulties described previously it will be possible to adhere to this new policy definitely. I fear that many public corporations in Germany have by no means relinquished their hopes of profiting at some opportune future time at the expense of foreigners, though Schacht himself, I believe, is convinced that to revert to former comparatively free policy of foreign borrowing by public corporations is absolute folly. Estimates of German private and public long-term loans floated abroad in 1925 are set by the semiofficial Reichkreditag Bank at 951 million marks in the United States, 122 million in Great Britain, 153 in the Netherlands, 69 million in Switzerland, and 25 million in Sweden.
[Page 203]Schacht stated recently in speech that Germany’s total foreign indebtedness was between 3,000 million marks and 3,500 million marks, but this indebtedness is placed by the Frankfurter Zeitung at 6,000 million marks, half of it being floating debt.