462.00R296/3956: Telegram

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

70. [Paraphrase.] Reference is to your No. 68 of June 6, 3 p.m.16 A favorable response seems to be the first reaction here to the manifesto. Please see my No. 68 of June 3, 4 p.m., paragraph 1, for a statement on the ultimate effect of the decree, which the manifesto supplements. [End paraphrase.]

Text of manifesto in translation follows:

“Text of the Reich Government’s appeal with which the new emergency decree was made public today reads as follows:

The expectation that the economic crisis of the world would abate with the spring of 1931 and that as a consequence the distress and unemployment in all industrial countries, and even more in raw material producing and agrarian countries, would decrease, has proved illusory. Germany shares in the world’s exchange of merchandise to the amount of 23 billion marks annually. She cannot escape alone from the universal distress from which even those countries are suffering which were victorious in the World War.

Our anxieties and difficulties are aggravated because in addition to the universal crisis in which we are living we are bearing special burdens, in that we, as the defeated in the Great War, have to make payments. These obligations were assumed on conditions which have not materialized and are depriving our economic life, impoverished by the War and by inflation, of capital which it sorely requires for its maintenance and further development. Withdrawal of capital means cessation and limitation of manufacturing activities, unemployment, reduction of private income and last, but not least, of State revenues. Over and beyond this our buying capacity on the world market is ready [reduced] by the amount we pay in tribute without receiving an equivalent.

The tribute payments weaken us as buyers and force us to throttle imports. They compel us to increase exports, against which other countries are ever increasing their opposition. The result is an ever sharper battle for world markets.

The Reich Government is obliged to impose upon the German peoples the greater burdens and sacrifices in order to be able to maintain the Reich’s capacity of payment. This is the condition for the continuation of German economic life; upon this depends the existence of millions and millions of war veterans, social pensioners, officials and employees.

We are often accused abroad and at home of not having been sufficiently economical. This accusation is at any rate not true with regard to Germany at the present time. All along the line the greatest efforts have been made to reduce expenditures to the lowest possible degree. After the new emergency decree goes into effect the expenditures of the Reich, including the reductions of last year, will be lower [Page 10] by the huge amount of 1.5 billions. As far as it is possible under present conditions to make any predictions at all the budget of the Reich for the current year will thereby be stabilized. It is the firm intention of the Reich Government that this emergency decree shall be the last step towards this goal.

In view of the possibility that the crisis may continue, despondency and indignation must not be permitted to weaken our strength. It is the statesmanlike duty of the Government now to provide for surmounting future difficulties. The intelligent will realize that this cannot be done without hardships which affect all portions of the population. It is better, although it may be painful, to reduce payments in an orderly way and to demand contributions from those who still have an income, than to conjure up the danger that these payments on which depends the standard of living of wide sections of the people should some day no longer be able to be met.

The states and municipalities are in a position similar to that of the Reich. They too have considerably restricted their expenditures and will have to do so even further. The Government cherishes no illusions as to the severity of the sacrifices to be made by all sections of the population, but the maintenance of the balance of the public budgets and protection of our economic life in view of its difficult position and the severe competition on the world market justify the measures which have been adopted.

We have [made] every exertion in order to meet our obligations arising from the last war. We have also made extensive use of foreign assistance towards this end. That is no longer possible. The drafting of the last forces and reserves of all sections of the populations gives the German Government the right—and makes it a duty towards its own people—to pronounce to the world: the limit of the privations which we can impose on our people has been reached. The premises on which the Young Plan was based have proved to be erroneous as a result of the development undergone by the world. The Young Plan has failed to give the German people the relief which according to the intentions of all concerned it was meant to give and of which it at first held out promise. The Government realizes that the extremely precarious economic and financial situation of the Reich imperiously requires Germany’s relief from unbearable reparation obligations. This is also a premise for the economic recuperation of the world.

The German people is in the midst of a decisive struggle for its future. A Government conscious of its responsibility must warn against the false belief that a favorable result can be achieved without sacrifices. If the German people believes in its future it must be determined to stake everything on it. Often in their history the Germans have failed to understand that in a critical situation not the strife of parties but the will of the entire people for self-assertion is the decisive factor. Such an hour has come. The Government cannot believe that the new generation has become so small and the elder so weak that they should not together be able to prove as in former crises—the greatness and the idealism of the German national character [Page 11] in the peaceable fight for our regeneration. Relying on the German people’s vital force and will to live the Government will act. Berlin, June 5th, 1931. The German Government.”

  1. Not printed.