462.00R296A1/69: Telegram

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

15. Ministerialdirektor Dieckhoff has officially informed me that British Government, probably because it failed to obtain French agreement to a provisorium, vide telegram number 7, January 9, 11 a.m.,90 has abandoned its previous attitude. Yesterday the British Ambassador formally urged Bruening to agree at Lausanne Conference to a 1 year’s continuation of present moratorium under existing conditions, same treatment of unconditional annuities and delayed settlement of conditional annuities. Rumbold described this as only solution which would provide opportunity for final reparation settlement late in the year. After Cabinet meetings the German Government this afternoon definitely declined to agree to new British proposal on grounds that it was impossible politically or economically to accept. Increasing economic difficulties and progressive financial stringency made an honest promise to meet such payments and delayed liabilities impossible. Moreover a promise that committed the Reich to a further recognition and continuance of the Young Plan would result in Government’s political overthrow. However, German Government intimating that if Lausanne Conference were delayed until May conditions might by then have altered sufficiently to permit of a compromise being worked out. German Government fears however that meeting of Lausanne Conference is now extremely dubious as France will probably refuse to attend.

Repeated to Brussels, Paris and London.

  1. Not printed.