The British Ambassador (Lindsay) to the Under Secretary of State (Castle)

Dear Mr. Under-Secretary: In accordance with my instructions, I communicate to you herewith a statement which will be made today in the House of Commons by the Chancellor of the Exchequer.

Believe me [etc.]

R. C. Lindsay
[Page 205]
Statement by the British Chancellor of the Exchequer (Snowden) in the House of Commons

“As my Right Honourable Friend the Prime Minister informed the House on June 22nd ‘His Majesty’s Government in the United Kingdom subscribe wholeheartedly to the principle of President Hoover’s proposal and are prepared to cooperate in the elaboration of the details with a view to giving it practical effect without delay.’ With the permission of the House I should like to take this opportunity to explain the steps which we have decided to take for this purpose.

“The more consideration we give to the President’s declaration the more it seems to us that that declaration constitutes a very great gesture on the part of the United States and it will be a thousand pities if Europe does not respond to it in the same spirit. The beneficial effect of the proposal may be lost unless steps are taken by all countries concerned to give it prompt and practical effect.

“This is particularly the case as regards Germany which after all is the essential difficulty. We agree with the view expressed by the United States Government that there is not time for a conference. A more prompt method must be found for putting into operation the proposal of the United States Government for a complete and immediate suspension of German payments to creditor governments.

“Procedure which we would favour is that credit[or] governments should forthwith notify Bank for International Settlements that they agree to proposal for suspension for one year of all German payments due to them. Decision of course does not rest with us alone and we are awaiting the views of the other creditor governments; but we hope that it may be possible to secure agreement on these lines as soon as possible.

“President Hoover’s proposal applies however to ‘all intergovernmental debts, reparations and relief debts.’ His Majesty’s Government for their part accept this proposal in spirit as well as letter. They will accordingly be ready to suspend for one year all such intergovernmental debts due to them as soon as President Hoover’s proposal has been generally accepted and in the meantime as from July 1st they will refrain from claiming instalments that may fall due. As regards relief debts His Majesty’s Government are at once taking steps to inform other European Governments which hold relief bonds of their action and to invite them to cooperate. Finally although His Majesty’s Government in the United Kingdom do not regard President Hoover’s proposal as directly affecting war obligations of the Dominions and of India to the United Kingdom which are a [Page 206] matter for discussion and settlement between those of His Majesty’s Governments concerned we felt we should be interpreting the wishes of the country in deciding freely to offer the Dominions and India the same concession as if proposed for foreign countries under the same conditions.

“Accordingly when inviting assent of the Dominion Governments and the Government of India for suspension of German payments so far as regards the share to which they are entitled we intimated that on the same principle we would readily give them the option of postponing the whole amount of their war debt payments to United Kingdom for a period of twelve months from July 1st, 1931, if they so desire.

“These proposals will involve loss to current budget which may reach approximately eleven million pounds. This is a serious sacrifice for taxpayers of this country upon whom such heavy calls have already been made but we hope that the step which we are taking in cooperation with the United States will be more than justified by the help it will give to reviving confidence and prosperity.”