462.00R296A/4: Telegram
The Secretary of State to the Ambassador in Germany (Sackett)
Washington, November 10, 1931—5
p.m.
195. Your 210, October 31, and 213, November 6. The Department notes your account of the French-German discussions and is pleased with the progress they seem to be making.
This Government is not committed in any way to approval of French action at this or later stages.
As regards the other matters touched on in the final paragraph of 213, the following is the attitude of this Government:
- (1)
- Negotiation on matters arising out of the coming expiration of the “Standstill” Agreement is being left to the private interests directly concerned. It would seem that the sooner this is effectively handled the more beneficial the result. In view of its possible importance as an element in our banking situation the subject is naturally of great interest to this Government.
- (2)
- Your message seems to indicate, however, that the Franco-German discussions are touching upon not only the short-term debts included in the Standstill Agreement but also other German obligations to private parties. If this is so, it is important that you make [Page 341] clear to the German Government, in such manner as you judge best, that the conversations that took place in Washington did not envisage any change in the rights of the American foreign creditors. The German Government is in a position to appreciate the importance of meeting German obligations to private creditors and we rely upon it to do so. Any action which would raise a question as to the continuation of the debt service on the bond issues of Germany or of her territorial subdivisions would at once destroy her credit, would alienate American support, and would make it impossible to secure the effective handling of the Standstill Agreement dealing with short-term obligations. Our attitude towards long-term obligations due not from the German public authorities but from German private parties is substantially the same in the event that any idea under discussion might lead to Government interference with the continuance of their loan service.
- (3)
- If we have misread your 213 and this matter does not seem to you to be at issue at all in the conversations, do not bring it up. We wish, if possible, to handle the matter as if it were a foregone conclusion that the service of all German long-term obligations would continue completely unchanged.
- (4)
- Keep the Department closely informed.
Stimson