462.00R294/788b

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

No. 124

The Secretary of State transmits herewith, for the information of the Embassy, a press statement issued on June 23, 1930, as well [Page 108] as the Agreement between the Governments of the German Reich and the United States of America, relative to the complete and final discbarge of the obligations of Germany to the United States in respect of the awards of the Mixed Claims Commission, United States and Germany, and the costs of the United States Army of Occupation.31

[Enclosure]

Statement Issued to the Press by the Secretary of the Treasury (Mellon) on June 23, 1930

The Secretary of the Treasury announced the signing to-day of the Agreement authorized by act of Congress approved June 5, 1930, providing for the complete and final discharge of the obligations of Germany to the United States in respect of the awards of the Mixed Claims Commission, United States and Germany, and the costs of the United States army of occupation.

In brief, the agreement provides that Germany agrees to pay 40,800,000 reichmarks ($9,700,000) for the period September 1, 1929 to March 31, 1930, and the sum of 40,800,000 reichmarks per annum from April 1, 1930 to March 31, 1981, in satisfaction of mixed claims, and for the period from September 1, 1929 to March 31, 1966, an average annuity of 25,300,000 reichmarks ($6,000,000) in full liquidation of our army costs. As evidence of this indebtedness Germany is to issue to the United States, at par, bonds maturing semiannually. Under the agreement the United States will receive on account of army costs over a period of 37 years approximately $250,000,000 and on account of mixed claims awards over a period of 52 years, approximately $505,000,000. The payments to be received on account of army costs include interest at the rate of about 3⅝ per cent per annum on all payments deferred over a period longer than would have been necessary to liquidate the army costs under the Paris agreement.32 The mixed claims awards bear interest at the rates specified in such awards up to January 1, 1928, and the settlement of war claims act specifies a rate of 5 per cent from that date until paid.

The payments to be received on this account include, therefore, interest which shall be paid on the awards. While the annuities are stated in terms of reichmarks, payments are to be made in dollars, either at the Treasury or at the Federal Reserve Bank of New York. The exchange value of the mark in relation to the dollar shall be calculated at the average of the middle rates prevailing on the Berlin bourse during the half monthly period preceding the date of payment. The German Government undertakes that the reichmark shall have [Page 109] and shall retain its convertibility into gold or devisen as contemplated in the present Reichsbank law and that the reichmark shall retain the mint parity defined in the German coinage law of August 30, 1924.

  1. For text of the agreement, see Annual Report of the Secretary of the Treasury … 1930, p. 341; or League of Nations Treaty Series, vol. cvi, p. 121.
  2. Signed January 14, 1925; Foreign Relations, 1925, vol. ii, p. 145.