Memorandum by the Office of the Under Secretary of State (Cotton)

Mr. Cotton: Mr. Phenix of Lee, Higginson & Company telephoned from New York and said that they had just had a telegram from Berlin saying that the Match discount was signed; that Lee, Higginson was making no official announcement but was merely handing to the press a translation of the official announcement which has been given out in Berlin. The statement follows:

“A German syndicate, headed by the Reichsbank, and an international syndicate to be formed under the leadership of Lee, Higginson & Company have undertaken to discount the proceeds of the $125,000,000 loan to be made by the N. V. Financielle Maatschappij Kreuger & Toll of Amsterdam to the Deutches Reich. As is known, [Page 102] this loan is payable to the Reich in two tranches, one of a face amount of $50,000,000 on August 30, 1930, and a second of a face amount of $75,000,000 on May 29, 1931. The syndicate will place the proceeds of the first tranche, in April 1930, and of the second tranche, about the middle of June 1930, at the disposal of the Reich. The members of the international syndicate will be announced later. As will be recalled, the proceeds of the match loan were to serve for the reduction of the current debt of the Reich. Through a discounting of the proceeds of this loan the Reichsfinanz Ministry will immediately effect this reduction of the current indebtedness. Aside from the foregoing, the debt reduction will be carried out as provided for in the law of December 24, 1929, which is to be effected in the course of the fiscal year 1930–31 through new taxes and economies in the amount of $450,000,000 Reichsmarks.”