462.00R296/5043
Memorandum by the Acting Secretary of State2
Mr. Sackett said that he had had another talk with the Chancellor and that the only suggestion which he could get and which he had already telephoned to Mr. Mellon, was to recognize the continuity of the Young Plan by a form of payment to the B. I. S. in bonds. This appeared to be a great deviation from the original plan. The bond issue, he said, would be used to pay the 560 millions net of unconditional payments, the bonds to be paid in installments each year from 1932 to 1958. The Germans seem to feel that these bonds might be used to furnish the guarantee fund obligation. They said that deliveries in kind would be wound up at once, carrying those through only which had been already financed by deposit in the B. I. S. This plan would relieve the German budget for the fiscal year 1931–32, although it would create an additional charge on Germany for subsequent years. Mr. Sackett said he had mentioned this in his telegram.
He stated that he had got information as to what Germany would do on July 15th, but thought it too risky to talk about on the telephone and would send us a cable.
As to the Customs Union, Mr. Sackett said the British made some sort of a proposition, but so weak that the Germans merely brushed it aside. He said the money received from the Central Bank had gone up to 50% and that included the 50 million reichsmarks which had been drawn out that day.
[Page 112]Mr. Sackett also said that he had not discussed with the Germans the plan which was in the President’s mind as to renewal of the offer to individual nations should France not accept the plan in any way which was adequate.
- Of trans-Atlantic telephone conversation with the Ambassador in Germany, June 30, 3:10 p.m.↩