462.00R296/3946: Telegram

The Chargé in Germany (Gordon) to the Secretary of State


67. Reference is made to the Department’s No. 64 of June 1, noon.8

As of this evening the official attitude of the German Government remains that Germany still does not feel able to suggest at Chequers any specific plans for relief from reparations. Germany does intend, however, to discuss fully the reparations question in general.
Since last Friday the Cabinet has been in continuous session. Discussions have dealt primarily with the new emergency tax decree which will be shortly forthcoming. During the course of these discussions reparation questions have constantly arisen. I understand, however, that the Cabinet has not arrived at a decision for directing a definite approach to discussions on the revision of reparations at Chequers. This was confirmed to me this afternoon by the Chief of the American Division of the Foreign Office. He corroborated at the same time the statements which I reported in paragraph 2 of my No. 65 of May 29, 4 p.m. He also stated that in the forthcoming exchange of views with the British, the Germans would fully set forth in general terms their economic situation without pressing for any solution along particular lines. He added that there could be no thought of making a definite decision or of doing more than exchanging views because the Germans well recognized that Chequers was not the place for making final decisions.
Dr. Paul Kempner, who is a most reliable source close to the Government (see my No. 6, January 23, 3 p.m.),8 informs me that since last Friday Bruening has met such strong and unexpected opposition to the tax decree (both in the Cabinet and outside it) that the pressure on him is greater than usual. In order to secure the [Page 4] Cabinet’s approval of this decree before he leaves tomorrow night the Chancellor will no doubt have to agree to initiate discussions at Chequers looking toward reparations revision without, however, indicating his specific line of approach or promising to propose specific relief measures.
It will be observed by the Department that once again a distinction is maintained between general and specific discussion of the reparation problem. Therefore there is no contradiction between this and what the Foreign Office has already said, although it clearly suggests the increased role which reparations matters will have in the conversations at Chequers and the rapidity with which the question is gaining momentum.
Dr. Kempner has consistently been among the group of Germans who have opposed raising the question of the revision of reparations prematurely. He now says that the German Government before the end of the summer will be forced to initiate general discussions with the interested Allied Powers on reparation revision.
Tomorrow I shall send another message supplementing this telegram.
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