462.00R296/5645a: Telegram

The Acting Secretary of State to the Ambassador in Germany (Sackett)

50. French and Italian Governments (which have payments due the United States June 15) appear to be holding off signing agreement [Page 620]with the United States regularizing the Hoover year debt postponement pending notification by Germany that it will agree to 4 percent instead of 3 percent interest rate in its postponement agreement with them. Please inquire as to attitude of German authorities toward this matter. Any failure of France or Italy to legalize debt postponement resulting in a declaration of default against them which they would blame on Germany’s failure to cooperate would have most unfortunate effect involving the entire situation in mutual recrimination and confusion.