862.51/2220: Telegram

The Ambassador in Germany (Schurman) to the Secretary of State

36. From Gilbert.26 As you will have noticed from my confidential telegram to Governor Strong,27 I have been devoting considerable time and effort since my return to question of German borrowings abroad and have had satisfactory discussions with the new Finance Minister and with the Reichsbank. Am not yet satisfied however that the Beratungsstelle is exercising an effective control over borrowings of states and municipalities. To some extent this is due to defects in the form of organization which make it difficult for it to resist political pressure. Hope that situation can be corrected but pending further developments I do not suggest any change in the Department’s letter about German loans in American market.28

For your confidential information. Believe special care should be taken regarding proposed loans to Prussian State and Reichspost in view of possible difficulties under article 248 of the Treaty of Versailles.29

  1. S. Parker Gilbert, agent general for reparation payments.
  2. Not printed.
  3. See letter to Harris, Forbes & Co., Nov. 21, 1925, Foreign Relations, 1925, vol. ii, p. 186.
  4. Malloy, Treaties, 1910–1923, vol. iii, pp. 3329, 3439.