The Secretary of State to the Yugoslav Minister ( Pitamic )

Sir: I have the honor to refer to the Note which you handed me on September 10, 1931, and to our conversation of that day concerning the position of your Government with respect to the Protocol signed at London on August 11, 1931, and designed to give effect to the President’s proposal for the suspension of intergovernmental debts for one year from July 1, 1931.

I have noted with satisfaction your statement that the Government of Yugoslavia “is desirous of contributing to the realization of such an important international action” and I can assure you that this Government would welcome any satisfactory arrangement, within the spirit of the President’s proposal, whereby your Government might see its way clear to participate in the debt suspension plan.

However, as I pointed out to you during our conversation on September 10, while the President of the United States made the initial proposal for a debt suspension in the interest of all, this Government feels that it cannot undertake to deal with the difficulties that may now lie in the way of any Government desirous of participating in the debt suspension arrangement.

It seems unnecessary to reiterate that at the time the President’s proposal was made the financial crisis was so acute that the creditors of Germany on reparations account would in any event have been called upon to sustain heavy losses of anticipated revenues. It is only natural therefore that the operation of the present plan entails the possibility of sacrifices on the part of the participating creditor Governments. In such sacrifices the United States itself has assumed an important share.

I may add in conclusion that while this Government is of course not in a position to suggest any particular solution of the difficulties now facing the Government of Yugoslavia, your Government is doubtless aware of the remarks made in this connection by the London Committee of Experts in their Report of August 11, 1931.

Accept [etc.]

Henry L. Stimson