The British Ambassador ( Lindsay ) to the Acting Secretary of State
My Dear Mr. Acting Secretary of State: The following is the text of a letter which the Treasury in London addressed to the Bank of International Settlements yesterday:—
“I am directed by the Lords Commissioners of H. M. Treasury to inform you that H. M. Government in the United Kingdom of Great Britain and Northern Ireland, H. M. Government in the Commonwealth of Australia, H. M. Government in Canada, H. M. Government in New Zealand, H. M. Government in the Union of South Africa and the Government of India have accepted in principle the proposal made by President Hoover on June 20th, 1931 for suspension of inter-Governmental payments (including reparation payments) falling due from July 1st, 1931 to June 30th, 1932. As you are aware certain outstanding questions as regards the method of giving effect to President Hoover’s proposal remain to be settled by the Governments concerned.
In the meantime a monthly instalment of the German annuity falls due on July 15th but, even it the German Government were in a position to transfer this instalment, to demand it would be manifestly inconsistent with acceptance in principle of President Hoover’s proposal.
The above-mentioned Governments have therefore decided to refrain in so far as they are concerned, from claiming any payment in respect of the instalment of both unconditional and conditional annuity falling due on July 15th, without prejudice to the rights of bondholders of the German external loan of 1924 and of the German Government five [Page 207] and a half per cent international loan of 1930 and on the understanding that the terms and conditions of suspension of this payment and of the eventual transfer of amount suspended will be those agreed upon hereafter for giving effect to President Hoover’s proposal.
The above-mentioned Governments feel it necessary to add that their decision has been taken with the object of giving immediate relief to existing difficulties in Germany in accordance with President Hoover’s proposal by a complete suspension of transfers (whether in cash or in kind) and it must not of course be understood as implying any derogation from the rights of these Governments under the Hague agreements in so far as any payments might be transferred by Germany.
The terms of this letter are being communicated to the other Governments signatory to the Hague agreements of January 20th, 1930 and to the United States Government.”
I am to inform you that copies of the above have been communicated to the Italian, Japanese, Belgian, Jugoslav, Portuguese, Greek, Roumanian and Polish Governments and that these governments have been urged to give similar instructions to the Bank of International Settlements.
His Majesty’s Representatives in Paris, Berlin and Prague have been instructed to inform the French, German and Czechoslovak Governments of the action taken by H. M. Treasury.
Believe me [etc.]